Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Dear brother in Islam, please could you clarify, how to calculate Zakat? I have a bank account, where my salary get paid every month. Throughout the year, there has been various transactions in the account. At some stage I had around only 2300 UAE Dirhams in the account and in recent month the funds sitting in my account are around 140,000 UAE Dirhams. Please tell me, how to calculate the Zakat, when the savings are not constant? Secondly, I also have a piece of land back home, for building purpose or in future I may sell it to buy bigger land to build on it. Do I have to pay Zakat on this piece of land as well?

I would really appreciate your help in this regards. Jazakumullah Kheir

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Answer:

Zakah determination

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

Your Question: Please tell me, how to calculate the Zakat, when the savings are not constant?

Respected brother, ‘zakah’ is only liable when the savings have been in your possession for a period of one full lunar calendar year…..thus if you wish to be precise, you could pay the ‘zakah’ for your savings after those savings have been in your possession for a full lunar calendar year.

Alternatively, you could derive an approximate average amount by adding the savings you had for each of the twelve months, and then pay the ‘zakah’ on the average amount at 2.50%.

For example:

Month 1: 2,300.00

Month 2: 3,000.00

Month 3: 5,000.00

Month 4: 8,000.00

Month 5: 15,000.00

Month 6: 30,000.00

Month 7: 50,000.00

Month 8: 20,000.00

Month 9: 100,000.00

Month 10: 140,000.00

Month 11: 120,000.00

Month 12: 140,000.00

Thus total 633,300.00 / 12 months = 52,775.00 average.

Your Question: ….Secondly, I also have a piece of land back home, for building purpose or in future I may sell it to buy bigger land to build on it. Do I have to pay Zakat on this piece of land as well?

If you had bought the piece of land for investment purposes, then it would constitute an excess asset, and you would be liable to pay ‘zakah’ annually on that land at the rate of 2.50% of its fair market value, provided the land has been your asset for a period of one full lunar calendar year.

Thus say you bought the land 5 years ago for 100,000.00 and the fair market value of the property today is 300,000.00….you would be liable to pay 2.50% of 300,000.00 or 7,500.00 as your ‘zakah’ for the year.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan