Zakaah for past years, and on shares in the event of a loss
Zakaah is one of the important obligations of Islam, and it is mentioned alongside prayer in the book of Allaah. Failing to pay it and procrastinating is a major sin.
There is a strong warning about not paying zakaah, which fills the believer’s heart with fear. For example, Allaah says (interpretation of the meaning):
“And those who hoard up gold and silver (Al‑Kanz: the money, the Zakaah of which has not been paid) and spend them not in the way of Allaah, announce unto them a painful torment.
35. On the Day when that (Al‑Kanz: money, gold and silver, the Zakaah of which has not been paid) will be heated in the fire of Hell and with it will be branded their foreheads, their flanks, and their backs, (and it will be said unto them:) ‘This is the treasure which you hoarded for yourselves. Now taste of what you used to hoard’
“And let not those who covetously withhold of that which Allaah has bestowed on them of His Bounty (wealth) think that it is good for them (and so they do not pay the obligatory Zakaah). Nay, it will be worse for them; the things which they covetously withheld, shall be tied to their necks like a collar on the Day of Resurrection. And to Allaah belongs the heritage of the heavens and the earth; and Allaah is Well‑Acquainted with all that you do”
[Aal ‘Imraan 3:180]
al-Bukhaari (1403) narrated that Abu Hurayrah (may Allaah be pleased with him) said: The Messenger of Allaah (peace and blessings of Allaah be upon him) said: “If Allaah gives a person wealth and he does not pay zakaah on it, his wealth will appear to him on the Day of Resurrection in the form of a bald-headed venomous snake with two fangs in its mouth which will encircle him on the Day of Resurrection, then it will hold him with its jaws then it will say: ‘I am your wealth, I am your treasure.’” Then he recited (the verse): “And let not those who covetously withhold of that which Allaah has bestowed on them of His Bounty (wealth) think that it is good for them…”
Hence what you must do is repent to Allaah, and pay the zakaah that you have missed, and also regret what has happened, seek forgiveness, and do a lot of righteous deeds.
If zakaah is obligatory upon a person but he does not pay it, then he must pay it for all the years that have passed.
Al-Nawawi (may Allaah have mercy on him) said in al-Majmoo’ (5/302): If several years have passed in which he did not pay zakaah, then he must pay zakaah for all of them. End quote.
Zakaah does not have to be paid on cash unless it reaches the nisaab (minimum threshold) and one year has passed. The nisaab is the equivalent of 85 grams of gold or 595 grams of silver.
There is no zakaah due on your salary, unless you have saved from it money that reaches the nisaab, or it reaches the nisaab when added to other money that you own, and one year has passed.
The shares in which a person deals buying and selling, are subject to the zakaah on trade goods, so at the end of the year you should estimate their value and pay zakaah at a rate of one-quarter of one-tenth (2.5%).
If the shares make a loss, then their value should be worked out; if it reaches the nisaab, then zakaah must be paid on them.
What counts is not the capital with which you bought the shares, but their value at the end of the year. If a person buys shares for ten thousand, for example, and their price falls and at the end of the year they are worth three thousand, then zakaah is due on three thousand, not ten thousand.
Based on that, you have to strive to pay zakaah for the past years. Work out how much money you had at the end of the year, then add to it the value of the shares at that time, then pay zakaah at 2.5 %, and so on for the end of each year.
We advise you to hasten to pay this zakaah and repent to Allaah. We ask Allaah to compensate you with good and to bless you from His bounty.
And Allaah knows best.