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If he buys land with unclear intentions, then he builds apartments on it for sale, does he have to give zakaah?

Question I am living in my father’s house with all of my family (father,mother,brothers), I purchased a plot (PLOT-1) for my own house construction, later on I purchased another plot (PLOT-2) joint with previous plot to extend my new house area. Then I purchased another plot (PLOT-3) joint with previous two plots but this time my intend was either to resale this plot or to joint with other 2 plots for my house construction. Now these three plots are joint and at same location. Now I had purchased fourth plot (PLOT-4) at different location where I changed my decision and decided to construct my house and also construction started. From the previous plots (PLOT-1 and PLOT-3) now my intend to build commercial houses for sale and for PLOT-2 my intend to sale it to utilize this amount for the construction of these commercial houses. It will take at least 2,3 years to be in position to construct these houses and sale it. So my question is 1. Shall I have to give zakat on these three plots (PLOT-1,2,3) now as only PLOT-2 is for resale purpose and PLOT-1,3 are for construction of houses for sale Or I have to give zakat only at the time of house sale.

Praise be to Allah.Firstly: If someone buys land with the intention of building on it and living on it, then he does not have to give zakaah, because land is not usually regarded as wealth that is subject to zakaah unless it is kept for the purpose of selling it. Ibn Qudaamah (may Allah have mercy on him) said: An item is not regarded as being for trade unless two conditions are met: Firstly: that he takes possession of it through some action, such as buying, or through marriage, khul‘, accepting a gift, a bequest, war booty, or other permissible ways of acquiring wealth, because the item that is not subject to zakaah when he acquires it does not become subject to it by means of a mere intention… And it makes no difference whether he acquires it through buying and selling or through some other means. Secondly: that he has the intention when taking it into his possession that it is for trade. If he does not have the intention when taking it into his possession that it is for trade, it is not to be regarded as being for trade, even if he intends that later on. If he takes possession of it through inheritance and intends that it is to be for trade, it is not regarded as a trade item, because in principle it is something to be kept, and to keep it for trade is something that occurs later (and is not the principle of the matter). So it does not become trade goods by means of a mere intention, just as if one who is not travelling intends to travel, he does not come under the rulings on travel without taking appropriate actions. End quote from al-Mughni (2/623). Some of the scholars are of the view that it does become trade goods by means of the intention, even if he took possession of it without any action on his part. This was narrated from Ahmad (may Allah have mercy on him). Ibn Qudaamah said, after the comments quoted above: It was narrated from Ahmad in another report that an item may become trade goods by means of a mere intention, because Samurah said: The Messenger of Allah (blessings and peace of Allah be upon him) instructed us to give zakaah on what we had prepared for sale. Based on that, it does not matter if he acquired it through his own actions or he took possession of it through trading; rather once he decides that it is for trade, it becomes trade goods. End quote from al-Mughni (2/336). The first view is the view of the Hanbalis, Hanafis, Maalikis and Shaafa‘is. See: Badaa’i‘ as-Sanaa’i‘ (2/12); Sharh al-Khurashi ‘ala Khaleel (2/195); al-Majmoo‘ (6/5); al-Mawsoo‘ah al-Fiqhiyyah (23/271). Secondly: If someone buys land and is unsure about what he intends to do with it – whether to live there or sell it – then no zakaah is due on it. Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) was asked: A man has some land but he is not sure about what he wants to do with it; he does not know whether he will sell it, develop it, rent it out or live on it. Should he pay zakaah when one full hijri year has passed? He replied: No zakaah is due on this land at all, so long as he has no definite intention that it is for trade. No zakaah is due on it because he is uncertain, and if there is uncertainty, even one per cent, then there is no zakaah on it. End quote from Majmoo‘ Fataawa Ibn ‘Uthaymeen (18/232). He also said: If a person is hesitant and says: By Allah I do not know whether I will sell it or keep it, such as if he has land and he says I do not know whether to sell it or keep it or put a high-rise building on it, is zakaah due on it or not? Answer: No zakaah is due on it, because the basic principle is that no zakaah is due unless one has a clear intention of selling it. End quote from al-Liqa’ ash-Shahri (3/5). Thirdly: If someone buys land to sell it, then decides to keep it, then it is regarded as a personal item, and no zakaah is due on it. Ibn Qudaamah (may Allah have mercy on him) said: If he buys it to sell it, then he decides to keep it, then he decides to sell it, no zakaah is due on it until he sells it and waits until one year has passed with regard to the money he received for it. There is no difference in our view if he intended to keep something that he originally intended to sell; in that case it is to be regarded as personal property and zakaah is no longer due on it. This is the view of ash-Shaafa‘i and ashaab ar-ra’y. End quote from al-Mughni (2/628). Fourthly: It is clear from your question that you bought four pieces of land, and no zakaah is due on any of them. With regard to the first and second pieces of land, no zakaah is due on them because you never bought them with the intention of selling them; rather you bought them to build yourself a house and extend it. As for the third piece of land, when you bought it you were not sure whether to sell it or add it to your house, so no zakaah is due on it either, even if you decide that you will build apartments on it to sell them. As for the fourth piece of land, no zakaah is due on it because you are going to build a house on it to live in, regardless of your intention when you bought it and regardless of whether you intended to sell it, then you decided to keep it. If a person buys land in order to sell it, then decides to keep it, it becomes personal property (so no zakaah is due on it), as mentioned above. Fifthly: If you sell any of the apartments and take possession of the money, then wait until one year has passed. Then when one year has passed, if it is still at or above the minimum threshold (nisaab), then you must give zakaah. Similarly, if you receive some payment, if it reaches the minimum threshold by itself or when added to other wealth, and one full year has passed, then zakaah becomes due. The nisaab is the equivalent of 595 grams of silver. The rate that must be given is one quarter of one tenth, i.e., 2.5%. And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/249774/if-he-buys-land-with-unclear-intentions-then-he-builds-apartments-on-it-for-sale-does-he-have-to-give-zakaah

He invested his money in business with someone; does he have to give zakah on both the capital and the profit, and how should he give it?

Question I gave some money to a trader to use it in doing business, and he will give me a small amount every month. I am not saving any of it, as I have commitments and many expenses each month, and I have no money left at the end of the month. Is zakah due on the capital that I gave to the trader to do business with it?

Praise be to Allah.Zakah is due on cash money, such as Egyptian pounds, if it reaches the minimum threshold (nisab) by itself, which is equivalent to 595 grams of silver. If the money is invested in business, the zakah must be given every time a (Hijri) year passes since taking possession of the capital; that does not change when the money is invested in the business. It says in Zad al-Mustaqni‘ (p. 87): If he buys trade goods with currency [that is, gold or silver] that reaches the minimum threshold, then the year for the trade goods (for zakah purposes) begins from the time when he acquired that currency. End quote. So if someone acquired 10,000 pounds, for example, on the first day of Ramadan, then he used it in Muharram to buy goods to sell, the year for zakah on the trade goods begins on the first of Ramadan, so he should work out the value of the goods on the first day of the following Ramadan, based on the market price, and he should note what his share of the trade goods and of the available cash is, then give zakah on it. Therefore the equation for working out zakah is as follows: The market value of the goods + the amount of available cash + any debts owed to you that you expect to collect. Then you should give 2.5% (one quarter of one tenth) of the total as zakah. The scholars of the Permanent Committee were asked (9/356): I have fifteen thousand riyals, which I gave to a man to do business with it in return for half of the profit. Is zakah due on this money? On what should I give the zakah – the capital, the profit, or both? If zakah is due on the capital, and I used the capital to buy specific items, such as carpets, furniture and the like, what is the ruling in this case? They replied: Zakah is due on the money mentioned, which was allocated for the purpose of trade, when one (Hijri) year has passed since acquiring it. Zakah must be given on both the capital and the profits at the end of the zakah year. If trade goods were bought with the money, then their value should be worked out at the end of the zakah year, based on the market price at that time, then zakah must be given at the rate of two and a half percent (2.5%) of the total amount of the wealth and the profit. End quote. Shaykh ‘Abd al-‘Aziz ibn ‘Abdillah ibn Baz, Shaykh ‘Abd ar-Razzaq ‘Afifi, Shaykh ‘Abdullah ibn Ghadyan. Shaykh Salih al-Fawzan (may Allah preserve him) was asked: I have some money, seven thousand Egyptian pounds, which I put into a commercial investment project. Is zakah due on it? What is the rate, and to whom should I give it? Should I give zakah on the capital only, or on the capital and the profit? He replied: Money that is invested in business is subject to zakah, if it reaches the minimum threshold (nisab) or more. It must be given on the profit as well, because the profit is connected to the capital, so zakah must be given on both. So you have to give zakah on this wealth when one (Hijri) year has passed. The profit should be added to it, then zakah must be given on the total at a rate of one quarter of one tenth… End quote from al-Muntaqa min Fatawa ash-Shaykh al-Fawzan. And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/423108/he-invested-his-money-in-business-with-someone-does-he-have-to-give-zakah-on-both-the-capital-and-the-profit-and-how-should-he-give-it

He Does Not Have Cash to Pay Zakah on Trade Goods

Question A person owns a piece of land and one year has passed since he acquired it. Zakah is due because it comes under the heading of trade goods (i.e., he bought it in order to sell it). How should he pay Zakah on it? Please note that he only has a little cash, very little.

Praise be to Allah.Is there Zakah on business goods? Zakah is due on trade goods according to the Quran and Sunnah. In the Quran, this is indicated by the general meaning of the verse in which Allah says (interpretation of the meaning):  “O you who believe! Spend of the good things which you have (legally) earned, and of that which We have produced from the earth for you.” [Al-Baqarah 2:267] Mujahid said: “Spend of the good things which you have (legally) earned” means trade.   With regard to evidence from the Sunnah, Abu Dawud narrated (1562) that Samurah ibn Jundub (may Allah be pleased with him) said: The Messenger of Allah (peace and blessings of Allah be upon him) used to command us to give Zakah from that which we had prepared for sale .  The Isnad of this Hadith is subject to some discussion, but some of the scholars classed it as sound, such as Ibn `Abd Al-Barr (may Allah have mercy on him), and it is the view that the scholars of the Standing Committee for Issuing Fatwas adopted. (See Fatawa Al-Lajnah Al-Da’imah, 9/331)  Conditions of Zakah on trade goods Zakah is due on things that have been prepared for trade if they reach the Nisab (minimum threshold) and one (lunar) year has passed (since they were acquired).  How to calculate Zakah on trade goods Based on this, Zakah must be paid on the land which has been in your possession for a year; you have to determine the value of the land at the end of the year, and pay one-quarter of ten percent . So if its value is one hundred thousand (100,000) Dinars, for example, you have to pay Zakah of 2.5% or two and a half thousand (2,500), and so on.  What happens if you don't have cash to pay Zakah on trade goods? If you have cash, then you must pay it and it is not permissible to delay paying Zakah until the land is sold . But if you do not have cash with which to pay the Zakah, then it becomes a debt that you owe and must be paid when it becomes possible to do so. If you cannot do it until you sell the land, then you have to pay Zakah from the price you receive for the land for each year in which Zakah was due.  Shaykh Ibn Baz (may Allah have mercy on him) said:  “Zakah is due on land that is prepared for trade. The evidence for that is the well-known Hadith of Samurah ibn Jundub (may Allah be pleased with him) who said: The Messenger of Allah (peace and blessings of Allah be upon him) used to command us to give Zakah from that which we had prepared for sale.”  He also said:  “If land and other similar things such as houses and cars, etc. are prepared for sale, then you must pay Zakah on them each year according to their value, when one full (lunar) year has passed. It is not permissible to delay that, except in the case of one who is unable to pay the Zakah on them because he does not have any other wealth. Then he may be given a respite until he sells it and pays the Zakah for all the years, each year according to its value at the end of that year, regardless of whether the value is more than the price he gets for it or is less than the price for which he bought the land, car or house." (Majmu` Fatawa Ibn Baz, 14/160-161) For more details, please see this category: Zakah on Goods of Trade. And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/47761/he-does-not-have-cash-to-pay-zakah-on-trade-goods

How is the hijri year worked out for trade goods if they were bought with cash?

Question I had a sum of money that surpasses the nisaab (minimum threshold at which zakaah becomes due) and a hijri year had not yet passed since I acquired it. I used it to open a shop. Do I have to pay zakaah on it? If the answer is yes, then how do I do that?

Praise be to Allah.Firstly: If the money reached the nisaab but one full hijri year had not yet passed since it reached the nisaab, then the person bought trade goods with it, he must pay zakaah when one full year has passed since the money reached the nisaab. He should not start counting a new year from when he first bought the trade goods; rather he should complete the year for the cash with which the goods were bought. An-Nawawi (may Allah have mercy on him) said: If he acquires [the trade goods] with money that reached the nisaab, then one full Hijri year must be counted from when he acquired the money…" (Al-Minhaaj ma‘a Haashiyati Ma‘na al-Muhtaaj  2/107). Al-Bahooti (may Allah have mercy on him) said: If it falls below the nisaab at some time during the year, or he exchanges the wealth that reached the nisaab for something of a different nature, the year is interrupted, except in the case of exchanging trade goods for their price [gold, silver or cash] or other trade goods. In that case, the year is not interrupted by this exchange, because it comes under the ruling on the same type of wealth when they are put together." (Kashshaaf al-Qinaa‘  2/178). For more information, please see the answer to question no. 32715 . Secondly: With regard to how to give zakaah on trade goods, at the end of the year you can work out the value of the goods that you have, based on the market price for which you are selling them on the day when they are evaluated, then give zakaah for them at a rate of 2.5%. For more information, please see the answers to questions no. 50726 and 22449 . And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/161816/how-is-the-hijri-year-worked-out-for-trade-goods-if-they-were-bought-with-cash

How to Give Zakah on Computer Apps and Software Programs

Question Is the zakah on trade goods due on mobile phone apps and computer programs? If someone wants to download a program or app, he pays money for that, but the app or program is still offered in the App Store, or on the Internet, for anyone who wants to download it from others, if they pay for it.  I think that the user agreements of the program state that the user does not own the program; rather he is given a license to download  and use a copy of the program, whilst all rights of ownership remain with the company that made the program, for example. So the price that the user pays to download it is no more than a few dollars, but when the company wants to sell the program to another company, for example, with all the rights of ownership, so that all profits resulting from the program will go to the purchasing company in the future, its value may be millions of dollars.  So is the program regarded as coming under the heading of trade goods, especially if the company does not intend to sell it; rather they make profits from what users pay to download it?  If the zakah on trade goods is not due on it, then what is due on it or on the money that the company earns?

Praise be to Allah.How to give zakah on trade goods Zakah on trade goods must be paid on everything that a Muslim is offering for sale with the intention of engaging in trade or making a profit, if the value thereof reaches the minimum threshold (nisab ) by itself or when added to what he owns of gold, silver or cash. This is because of the report narrated by Abu Dawud in his Sunan with a hasan isnad from Samurah ibn Jundub, who said: The Messenger of Allah (blessings and peace of Allah be upon him) used to instruct us to give zakah on what we had prepared for sale . The nisab (minimum threshold at which zakah becomes due) is the equivalent of 595 grams of silver. Zakah on computer apps and software programs Based on that, if someone produces these apps and programs and offers them for sale, and they reach the minimum threshold, then he must work out their value when one full Hijri year has passed, based on the current market value, then give one quarter of one tenth (2.5 %). If they are sold before one full Hijri year has passed, then zakah must be paid on their price when the year is complete. If he invests that money in buying more goods for sale, he must give zakah on these goods when one year is completed. If the year will be completed in Ramadan, and he sells the product before Ramadan, he should give zakah on whatever he has in his possession of its price in Ramadan. If he invests it in buying other products for sale, he should work out the value of these new products in Ramadan, and give zakah on it. He should also add to that what he is owed of debts that he hopes will be repaid, and give zakah on the total amount when the year is completed. Should we pay zakah on software programs which are not for sale? If the program is not for sale; rather the one who wants it may use it in return for a payment, whilst ownership remains in the hands of the producer, then that is not subject to zakat on trade goods. Rather the money that the company acquires in return for letting its customers use this program is subject to zakat on cash, if this money reaches the minimum threshold and one full Hijri year has passed. If the seller acquires enough of these payments to reach the minimum threshold, by itself or when added to other wealth that he has, and one full hijri year has passed, zakah must be paid on it, at a rate of one-quarter of one tenth. And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/296865/how-to-give-zakah-on-computer-apps-and-software-programs

Zakah on Trade Goods and Shop Fittings

Question I have a shop in which there is equipment worth 80,000 riyals, and there are people who owe the shop debts totalling 80,000 riyals. There was a fire in the shop 6 months ago and new merchandise has been and renovations have been done, which together add up to 40,000, of which 35,000 has been borrowed in the name of the shop, to be paid back in instalments.  My first question is: should we pay zakah on the total amount of equipment that was in the store before the fire? Total cost + debts – new stock and renovation.  My second question is: A full year has not yet passed since the renovations; should we pay zakah on it or only on the whole shop and the debts that we are owed?

Praise be to Allah.Types of goods in shops The goods that are found in a shop fall into two categories:  Those that are prepared for sale, whether they are real estate, food, clothes, or other kinds of goods that are sold.  Those that are not prepared for sale, rather they are for producing goods or are to be used, such as manufacturing equipment , cars, furniture, cameras and computers, etc.  The first category are those that are called “trade goods” and these are the ones on which zakah must be paid. As for the second category, they are known as fixed assets, and no zakah is due on them.  In the answer to question no. 42072 , we stated that it is obligatory to pay zakah on trade goods, and we explained the nisab (minimum threshold), and the fact that fixtures that are not prepared for sale are not subject to zakah.  In the answer to question no. 22449 , we explained that it is permissible to pay zakah on trade goods in kind , and that it does not have to be paid in cash .  For information on how to calculate zakah on trade goods , please see the answer to question no. 26236 , in which it explains that zakah is to be paid on the sale price , not the purchase price.  Zakah on trade good In conclusion, if the time for paying zakah on your shop has come, then you should take stock of what you have in the shop, such as the goods that you have there, and add them to whatever you have of cash, and add that total to the debts that you hope will be paid back, then pay zakah on the total at a rate of one-quarter of one-tenth.  As for the debts which you have no hope that they will be paid back because they are owed by people who delay payment or who are poor, then no zakah is due on them until you take possession of them and start to reckon a new year from the day you receive them. In order to be on the safe side, when you receive them, pay zakah for one year only, even if several years have passed. Please see question no. 1346 .  The debts that you owe are not to be deducted from the wealth on which you have to pay zakah, according to the more correct scholarly view. See question no. 22426 .  Zakah on lost goods The goods that were lost in the fire are not to be added to the total of goods in the store.  As for the things that you put in the store after the fire, if they have to do with furnishings, décor and fixtures, then as we have stated above, no zakah is due on them, so they should not be included among the goods in the store that are subject to zakah. If they are goods that are for sale, then if you bought them with the shop’s funds and profits, then zakah should be paid on them when you pay zakah for the shop’s goods even if one year has not yet passed. If you bought them with other money that does not belong to the store, then you should count one year from the time when you acquired the wealth with which you bought them.   We ask Allah to compensate you with good and to bless you with a goodly provision. For more, please see this category: Zakaah on trade goods  And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/50726/zakah-on-trade-goods-and-shop-fittings

Selling old coins for more than their face value

Question If we want to sell old coins, such as old Arabian and French coins, are they to be regarded as currency or are they to be dealt with on the basis that they are a kind of trade goods?

Praise be to Allah.If the old coins are made of gold and are sold for gold, or they are made of silver and are sold for silver, then they must be equal in weight and the exchange must take place on the spot. If they are sold for something other than their own type, such as if gold is sold for silver or cash, or silver is sold for cash, then the exchange must take place in the same sitting, but it is not stipulated that they be equal in weight, because the Prophet (blessings and peace of Allah be upon him) said: “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, like for like, same for same, hand to hand. But if these commodities differ, then sell as you like, as long as it is hand to hand.” Narrated by Muslim (2970), from the hadith of ‘Ubaadah ibn as-Saamit (may Allah be pleased with him). It makes no difference in that regard whether the currency is used now or is not used, so long as it is made of gold or silver, which according to the religious texts are among the categories that are subject to riba (usury). But if the currency is made of something other than gold or silver, such as if it is made of paper or copper and the like, and it is no longer in circulation and is no longer used to work out the prices of things, then the issue of riba no longer applies to it, and it has become a kind of trade good. In that case, it is permissible to buy it and sell it for whatever price the two parties to the transaction agree upon, provided there is no extravagance, because some people spend excessive amounts of money to buy these old coins, but Islamic teachings enjoin being careful with one’s wealth and forbid wasting it. Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) was asked about selling old coins for more than their face value. He replied: There is nothing wrong with that, because old currencies are no longer used as cash. So if, for example, someone has one of the early, red riyal notes, or a five-riyal note or a ten-riyal note that is no longer legal tender, and he wants to sell that ten-riyal note for one hundred riyals, there is nothing wrong with that, because now it has become an item for sale and is no longer currency, so there is nothing wrong with that.  "Liqa’ al-Baab al-Maftooh (233/18)" And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/97488/selling-old-coins-for-more-than-their-face-value

How should each partner pay his share of zakah on trade goods when one full (Hijri) year has passed on his wealth?

Question We are partners in some trade goods that we sell. The time to give zakah has come for one of us, and each of us put in one quarter of the money with which we bought the trade goods. How should the one who wants to pay zakah work out the value of his share of these trade goods? Please note that each partner takes his share of the profit, so if the product is worth 30 pounds, and we sell it for 34, do we evaluate it as being worth 31 or 34? How do we work out the other hidden costs of the product, such as transportation, storage and so on? If it cost me 30 and I sell it for 34, the four pounds is not regarded as net profit for us, because there are transportation costs, and there are payments to employees and others. So after evaluating it on the basis of the selling price, can I deduct these expenses from that figure?

Praise be to Allah.What is required regarding zakah on trade goods is to work out their value after one full year has passed based on the current selling price. If the trade goods belong to partners, and one full year has passed for one of them, he should work out the value of all the goods, then look at how much his share is of them, such as one quarter or one half. Then if that amount reaches the nisaab [minimum threshold at which zakah becomes due] either by itself or when added to other goods, or cash, or gold or silver, then he should pay zakah on it. When it comes to the zakah on trade goods, no attention is to be paid to the costs of transporting them at the time of sale, or the wages of workers, or rent for the shop, or costs for electricity and the like. Rather even debts owed by the one who is giving zakah are not deducted from the amount, even if the trade goods themselves are purchased on credit, according to the more correct scholarly view. Please see the answers to questions no. 22426 and 124095 . Rather we only look at its market value, which is usually equal to the price for which it is being sold. It is no secret that zakah is only paid on the goods that are present when one full year has passed, even though they may be sold and other goods bought with their price, and this may be repeated several times during the year. So zakah is paid only once, and it is paid only on what is present at the time when one full year has passed. So the costs are covered by the profits and repeated buying and selling. Based on that, if the value of the goods when one full year has passed is 34, and the one who is paying zakah owns one quarter of the goods, then his share is 8.5. So he should give zakah if that reaches the nisaab by itself or when added to other cash that he owns, then he should give zakah at a rate of one quarter of one tenth (2.5%). And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/364332/how-should-each-partner-pay-his-share-of-zakah-on-trade-goods-when-one-full-hijri-year-has-passed-on-his-wealth

If he is hesitant about whether he wants to sell the land, then there is no zakaah on it

Question I have a piece of land; when I bought it, my intention was 70% that I would sell it. Is zakaah due on it when I have the intention 30% to build on it and not sell it?

Praise be to Allah.So long as you do not have a firm intention to sell it, then no zakaah is due on it, because the basic principle is that it was bought to be kept, so it does not become like trade goods except when you form the firm intention to sell it. But if you are still hesitant, then no zakaah is due on it. Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) was asked: There is a man who has a piece of land, and his intention regarding it was not certain. He does not know whether he wants to sell it, develop it, rent it out, or live on it. Should he pay zakaah when one full Hijri year has passed? He replied: No zakaah is due on this land at all, so long as he has not firmly decided that he wants to sell it. So no zakaah is due on it, because he is unsure, and if one is hesitant even one percent, no zakaah is due on it. End quote from Majmoo‘ Fataawa Ibn ‘Uthaymeen (18/232). And he said: If a person is hesitant and says: By Allah, I do not know whether I should sell it or keep it – for example, he has a piece of land and he says: I do not know whether I should sell it or keep it or build an apartment block on it, is zakaah due on it or not? The answer is: no zakaah is due on it, because the basic principle is that zakaah does not become obligatory until one has a firm intention that he wants to sell it. End quote from al-Liqa’ ash-Shahri (3/5). And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/117711/if-he-is-hesitant-about-whether-he-wants-to-sell-the-land-then-there-is-no-zakaah-on-it

Ruling on delaying zakaah on trade goods due to lack of cash flow; does he have to borrow money in order to give zakaah?

Question I have a bookshop in which I have trade goods that are equal to the nisaab (minimum threshold at which zakaah becomes due) and more, but I do not have cash with which to pay zakaah, and one full year has passed. My question is: Should I wait until I have sufficient money and then pay zakaah, or should I borrow money in order to pay zakaah?

Praise be to Allah.Firstly: Zakaah is due on trade goods, when they reach the minimum threshold by themselves or when added to cash and other wealth, and one full Hijri year has passed. You should work out their value when the year has passed, regardless of whether it is above or below the purchase price, and give one quarter of one tenth (2.5%). Secondly: If the wealth reached the minimum threshold and one full Hijri year has passed, then it becomes obligatory to give zakaah immediately, and it is not permissible to delay it unless one has an excuse. An-Nawawi (may Allah have mercy on him) said: It is obligatory to give zakaah immediately when it becomes due, if one is able to pay, and it is not permissible to delay it. This was stated by Maalik, Ahmad and the majority of scholars, because Allah, may He be exalted, says (interpretation of the meaning): {and give zakah} [al-Baqarah 2:43], and the command means that it is to be done immediately. End quote from Sharh al-Muhadhdhab (5/308). In al-Iqna‘ ma‘a Sharhihi Kashshaaf al-Qinaa‘ (2/255) it says: It is not permissible to delay giving zakaah on wealth once it becomes due, if one is able to give it. So it must be given immediately… Unless the one for whom zakaah has become due fears harm, in which case he may delay it, because of the hadith: “There should be neither harm nor reciprocating harm.” … Or if the owner is poor and needs to keep his zakaah, and his own needs and livelihood will be affected if he gives it, and it can be taken from him when his situation improves. End quote. See: al-Mughni (2/510). Thirdly: If you do not have sufficient cash to give zakaah on your trade goods, then you can give it in the form of the trade goods on which the zakaah is due, because the zakaah on trade goods may be given in the form of those goods, according to the more correct scholarly view.  Imam Abu ‘Ubayd al-Qaasim ibn Salaam (may Allah have mercy on him) said: If zakaah becomes due on a man’s trade goods, so he works out the amount of trade goods that he has and finds out that the zakaah reached the value of one garment, mount or slave, so he gives that particular item as the zakaah on his wealth, then in our view he has done well and his zakaah is acceptable. But if it is easier for him to pay the equivalent value in gold or silver, he may do that. This is how the zakaah on trade goods is to be given, in our view. End quote from al-Amwaal by Abu ‘Ubayd (388); quoted from him by Humayd ibn Zanjawayh in al-Amwaal (3/974). If the trade goods you have are of no benefit to the poor person who is entitled to zakaah, and he has no need of these trade goods, then there is nothing wrong with you delaying zakaah, in sha Allah, until you sell enough to cover the zakaah you have to give. If you have sufficient cash to pay some of the zakaah, then you have to give what you can, and whatever you cannot give remains a debt that you owe until you are able to give it. See also the answer to question no. 47761 . And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/177963/ruling-on-delaying-zakaah-on-trade-goods-due-to-lack-of-cash-flow-does-he-have-to-borrow-money-in-order-to-give-zakaah

How should he pay zakaah on money in a profit-sharing investment on which he will receive the profits in three years’ time?

Question I had money reaching the minimum threshold (nisaab) on which I pay zakaah on the first of Ramadan, then I put it in an Islamic profit-sharing (mudaarabah) investment, on which the profits will be distributed in three years’ time. When the month of Ramadan came, I had no cash flow with which to pay zakaah. Can I refrain from giving zakaah until I receive the profits in three years’ time? When I receive the profits, should I give zakaah on the profits + the capital at a rate of 2.5%, or should I give zakaah on the profits only at a rate of 10%? Should I give zakaah only once, or three times for three years? I hope that you can give a straightforward answer, without too much elaboration. Thank you.

Praise be to Allah.Firstly: The time for giving zakaah on money is not changed as a result of putting the money in a profit-sharing (mudaarabah) investment. If someone has cash for which the time of giving zakaah is in Ramadan, then he puts it into a profit-sharing investment, i.e., in trade goods, then the time for giving zakaah does not change; rather it remains in Ramadan, because cash and trade goods fall under the same category. Ibn Qudaamah (may Allah have mercy on him) said in al-Mughni (2/504): If someone buys trade goods with capital that reached the nisaab (minimum threshold at which zakaah becomes due), or he sold trade goods and the price he received reached the minimum threshold, the time for giving zakaah does not change, because zakaah is due on the value of the goods, not on the goods themselves, so they are of the same category. End quote. Secondly: If what you mean by Islamic profit-sharing is putting the money in an Islamic bank for investment, and you cannot work out the value of the trade goods or the project in which the investment is made, and you cannot find out what your profit is every year, then you should realise that zakaah is due on the capital, which you do know, so you should give zakaah on the capital every year, and on the estimated profit. Then when you receive the profit in three years’ time, you can compare it with the amount you already paid, and give anything that you still owe, if anything remains due from you. If you do not have any cash flow, then zakaah is a debt that you owe. It says in a statement of the Islamic Fiqh Council, no. 143 (1/61), regarding zakaah on restricted-access accounts: Zakaah is due on the balance in investment accounts, and on their profits, and is to be paid by the holders of these accounts, if they meet the conditions of zakaah being obligatory, whether the accounts are long-term or short-term, even if no withdrawals were made from the accounts, regardless of whether that was because of restrictions imposed by the investment company or by the account holder. End quote. See the text of the statement in the answer to question no. 250818 . Thirdly: The zakaah that must be paid on both capital and profits is one quarter of one tenth (2.5%), not one tenth (10%). This must be paid every year, as noted above, except in the case of one who has no cash flow and no trade goods that he can give; in that case zakaah becomes a debt that he owes, which he can pay when he acquires money from this profit-sharing investment or elsewhere. Fourthly: If the profit-sharing investment is not in trade goods, or through an Islamic bank, as explained above, then we hope that you will explain the type of investment portfolio in which you deposited this money, so that we can see whether it is an investment portfolio in which the bank pays zakaah on your behalf or not. And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/333351/how-should-he-pay-zakaah-on-money-in-a-profit-sharing-investment-on-which-he-will-receive-the-profits-in-three-years-time

She invested money in a chicken farm project and always spends the returns straight away; how should she pay zakaah?

Question We are a family of five people. My mother invested $25,000 in a chicken farm project, and we use the returns on this project for our daily household expenses. What is the amount that we have to pay for zakaah on that? Is it on the entire amount or on the profits only?

Praise be to Allah.Zakaah is due on what a person prepares for sale, because of the report narrated by Abu Dawood (1562) from Samurah ibn Jundub (may Allah be pleased with him), who said: The Messenger of Allah (blessings and peace of Allah be upon him) would instruct us to give zakaah on that which we prepared for sale. So if the farm project raises and sells the chickens, then the zakaah on trade goods is due on them. So the value of the chickens should be worked out at the end of the Hijri year, and a quarter of one tenth (2.5%) should be paid on that. No attention should be paid to the price for which they were bought, or to the capital which funded the project. So at the end of the Hijri year, you should look at the chickens that have been prepared for sale, and the eggs that have been prepared for sale too, and work out their value based on the price for which they are sold, then pay zakaah on that value. The Hijri year begins from the time when you took possession of the minimum threshold of cash with which the project was started. This profit is to be added to the value of the chickens and eggs, if it (the profit) is still with you when one year has passed since the project began. The money earned does not have a separate year for calculating zakaah; rather its year is the same as the year of the project. With regard to what is spent of this profit before the end of the year, no zakaah is due on it. It should be noted that zakaah is only due on what is prepared and ready for sale, such as the chickens and eggs. With regard to equipment and tools that are used for this project, no zakaah is due on them. And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/149749/she-invested-money-in-a-chicken-farm-project-and-always-spends-the-returns-straight-away-how-should-she-pay-zakaah

He bought a piece of land by instalments in order to trade it; how should he pay zakah on it?

Question   1. I bought a piece of land last Ramadan, and I bought it by instalments from (…) Bank. The price of the land is 211,500 riyals and the payment period is over five years, at a rate of 3525 riyals per month. But ownership of this land is still held by the bank, and it has not been registered in my name yet; that will not happen until after the final instalment has been paid (even though I bought it on the basis of a promise from them that they would transfer ownership immediately, but they were not able to do it because of a decision by the financial institution which did not allow that). So the land will remain under their ownership until all payments have been made, and I cannot dispose of it; if I want to sell it, it must be done through them so that they can take the remainder of the instalments and I will get whatever is left. Up till now I have paid twelve instalments, and there are four years left until the end of the instalments. My question is: do I have to pay zakaah on it? Do I have to pay zakaah for the entire value or only for what I have paid of it? In this situation, is zakaah worked out on the basis of its value at the time of purchase, or what it is worth now, as it is now worth 230,000 riyals? Please note that my intention when buying it was to trade in it, and I do not know whether, after the payment period ends, the intention may change to keeping it and building myself a house on it. 2. My father is retired and he receives a small pension despite the fact that he has many expenses. He often takes money from us – and we give it to him willingly, praise be to Allah – but when giving zakaah, is it permissible for us to give him some of our zakaah without telling him that it is zakaah, because he would never take it in that case?

Praise be to Allah.Firstly:  If the contract between you and the bank is for the purchase of this piece of land then this land becomes your property, even if you have not yet paid its price in full, and the rest of the price is a debt that you owe.  But if you cannot dispose of this land and sell it until all instalments have been paid, then in this case you do not have to pay zakah on it, because your ownership of this land is not yet complete, and one of the conditions of zakah being obligatory is that one should have full ownership in which sale of the property in question is completely under one’s control.  It says in Fataawa al-Lajnah ad-Daa’imah (9/449) concerning land which the owner is prevented from disposing of: If you are not allowed to dispose of it, then you do not have to pay zakah on it until you are able to dispose of it; then after that you must pay zakah on it in the future, when one full hijri year has passed since you became able to dispose of it. End quote.  But if you are able to dispose of this land and sell it, even if that is via the bank without that being detrimental to your interests, then in this case you are obliged to pay zakah on it, i.e., the zakah on trade goods (2.5%).  Secondly:  zakah must be paid on the full value of the land, because the remaining instalments are a debt that you owe to the bank. The more correct of the two scholarly opinions is that debt does not rule out the obligation of paying zakah, as has been discussed previously in the answer to question no. 22426 Thirdly:  What you must do is give zakah on this land based on its market price on the day zakah becomes due, whether this value is equivalent to the sale price or is less or more than that. The value of the land should be worked out at the end of the zakah year, then its zakah must be paid on that basis.  This has been discussed previously in the answer to question no. 26236  Fourthly:  So long as you currently intend to trade in that land, then you must give zakah on it. If your intention changes later on, and you decide to use it for building a house or some other purpose, then you do not have to give zakah on it.  See the answer to question no. 117711 .  Fifthly:  It is not permissible to give zakah to the ascendants or descendants of the one who is giving the zakah, such as the father or mother, or the son or daughter.  This has been discussed previously in the answer to question no. 81122  And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/141551/he-bought-a-piece-of-land-by-instalments-in-order-to-trade-it-how-should-he-pay-zakah-on-it

He bought Islamic sukuk; does he have to pay zakaah on the profits or on both the profits and the principal?

Question I bought some Islamic sukuk (investment certificates or bonds) three years ago, and I receive the profits at the end of the company’s financial year. Should I pay zakaah on this money based on the value of the profits or based on the value of the principal?

Praise be to Allah.If you bought the Islamic sukuk (investment certificates or bonds) with the intention of trading in them and selling them when the price rises, then zakaah is due on them and on their profits. So you should work out their value at the end of the hijri year, based on the market price, and give one quarter of one tenth (2.5%) of this value. You should also give zakaah at the same rate on what you receive of profits on them. But if you bought the sukuk with the intention of keeping them and benefiting from their profits only, then you should pay zakaah on the profits, not on the sukuk, unless some of the money that you gave to the company that is taking care of the sukuk was not invested and the like. In that case, you should work out how much of this money was put into each sakk [sing. of sukuk], and the owner of the sakk should pay zakaah on this cash that was not invested. For more information, please see the answer to question no. 69912 . It says in a statement of the Islamic Fiqh Council that was issued during its fourth conference in Jeddah, in the Kingdom of Saudi Arabia, 18-23 Jumaada al-Aakhirah 1408 AH/6-11 February 1988 CE regarding zakaah on shares, which is also applicable in the case of sukuk: If the investment company did not give zakaah on its wealth for any reason, then the shareholders must pay zakaah on their shares. If the shareholder can find out from the company’s accounts how much zakaah is due on his shares, if the company gives zakaah on its wealth in the manner referred to, then he should give zakaah on his shares in the same way, because this is the guideline on giving zakaah on shares. If the shareholder is not able to find that out: if he bought shares in the company with the aim of benefitting from the annual profit on those shares, and not with the aim of trading in them, then the owner of these shares is not required to pay zakaah on the original share; rather he must give zakaah on the profit, at a rate of one quarter of one tenth after one full Hijri year has passed since he received the profit on the share, taking into consideration the conditions of zakaah, and assuming that there is no impediment. If the shareholder acquired the shares with the intention of trading in them, then they come under the ruling on the zakaah on trade goods. So when one full Hijri year has passed since he acquired the shares, he should give zakaah on their market value. If there is no market for them, he should give zakaah on their value as determined by experts, and give one quarter of one tenth (2.5%) of that value and of the profit, if the shares earned any profit. End quote from Majallat al-Majma‘ (4/1/882). And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/131229/he-bought-islamic-sukuk-does-he-have-to-pay-zakaah-on-the-profits-or-on-both-the-profits-and-the-principal

Is There Zakah Due on Factory Products?

Question I have a factory that produces soap, and its capital is composed of the following: 1. Fixed assets in the form of buildings, land, machinery, equipment and cars. 2. Stock of unprocessed raw materials. 3. Stock of ready-for-market products. 4. Current balances in banks.  My question is: how should I pay Zakah on this factory? I hope that you will explain in detail.

Praise be to Allah.Zakah must be paid on gold, silver and cash, and also on trade goods , livestock and anything extracted from the ground. It is not paid on buildings, machinery and land, unless they are intended for sale. Based on that, no Zakah is due on the fixed assets that you own, namely the buildings, land, machinery , equipment and cars. Zakah is due on the products that are ready for market, and also on the raw materials , because they were bought with the intention of processing them and trading in them.  The way to evaluate their Zakah is to assess the value of the processed materials and the raw materials, according to the market price when one Hijri year has passed, then give one quarter of one tenth (2.5%) of that amount.  Zakah must also be paid on the balances in the bank . So you should look at what is in the bank accounts when one Hijri year has passed, then give Zakah on that. The rate that is due is one quarter of one tenth (2.5%). Zakah must also be paid on debts that are owed to you by others, if they acknowledge those debts and agree to pay them, meaning that they do not deny them and are not in financial difficulty. You should give Zakah on these debts when one full Hijri year has passed. With regard to debts that you owe , if there are any, they do not have any impact on Zakah and are not deducted from it, according to the more correct scholarly view. For more details, please see this category: Zakah on Trade Goods And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods

https://islamqa.info/en/answers/125918/is-there-zakah-due-on-factory-products

If a person buys land in order to protect his wealth, does he have to pay zakaah when one year has passed?

Question There is a man who bought a piece of land, not with the intention of trading it; rather his intention in buying it was to protect his wealth and keep it from being lost, and when he needs the money he will sell it. Is zakaah due on it or not?.

Praise be to Allah. If a person buys land and does not intend to trade in it; rather his aim is to protect his wealth or some other reason, then he is not obliged to pay zakaah on the land even if it remains like this with him for ten years, because he did not intend to trade in it, and because of the report narrated by Ibn ‘Umar (may Allah be pleased with him) who said: “There is no zakaah on goods unless they are for trade.” Narrated by al-Bayhaqi and classed as saheeh by al-Nawawi in al-Majmoo‘ (6/5). Also classed as saheeh by al-Haafiz ibn Hajar (may Allah have mercy on him) in al-Diraayah, 1/261.  Al-Bahooti said in Sharh Muntaha’l-Iraadaat, 1/434:  “Goods” refers to that which is prepared for buying and selling in order to make a profit, even if it is currency. End quote.  Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) said:  “Trade goods” refers to that which a person prepares for the purpose of making money. Any kind of wealth that a person prepares for making money is regarded as trade goods, whether it is livestock, crops, grains, cars, machines or anything else. Hence you find a merchant offering an item and selling it in the evening, because he does not want the item in and of itself; rather the aim is to make a profit. So everything that is prepared for the purpose of making money is trade goods.  End quote from Sharh al-Kaafi.  He also said: Trade goods are kinds of wealth that a person prepares for business, i.e., he has no aim other than trading in them. End quote from Liqa’ al-Baab al-Maftooh, 78.  He was asked about one who puts his wealth in land, not intending to trade in it or build on it or cultivate it; rather he says, It is to protect my wealth, and if I need it (the money), I will sell it. Is zakaah due on that?  He replied:  No zakaah is due on it. Some of the fuqaha’ even say that if he buys real estate with his money so as to evade zakaah, no zakaah is due on it! But this is like cheating [thus zakaah remains obligatory for him]. End quote from Thamaraat al-Tadween.  And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/146371/if-a-person-buys-land-in-order-to-protect-his-wealth-does-he-have-to-pay-zakaah-when-one-year-has-passed

A contractor who owns real estate and building equipment; does he have to pay zakaah?

Question My father owns properties for rent and a piece of land. He owns some of it while he still is paying instalments of this piece of land. As for the properties, he rents them out. But what he gains from this does not reach the specific amount that must be paid as Zakah (2.5%) if this is the right proportion that should be paid as Zakah on properties. He owns timber as well and two cars. I would like to know what should Zakah be paid on, and how much should my father pay? My aunt is divorced. And my cousin is a widow and she has orphan children. I think my cousin deserves the Zakah to be given to her. What about my aunt? My aunt has a daughter who is working and they have a quite good income. Should my father give her a part of the Zakah as well? Or should he just give her money as a gift in order to strengthen the womb relations with the family? Bear in mind that my aunt’s daughter does not dress modestly and she uses make up. I do not know if Zakah should be given to them. Please provide us with a detailed answer.

Praise be to Allah.Firstly:  No zakaah is due on the real estate and land unless the owner intends to trade in them. But that which he intends to use or rent out is not subject to zakaah. Rather zakaah is due on the rent if it reaches the nisaab (minimum threshold), which is the equivalent of 595 grams of silver, when one whole (hijri) year has passed since it was acquired.  The rate of zakaah that must be paid is one quarter of one tenth, i.e., 2.5%,  It says in Fataawa al-Lajnah al-Daa’imah li’l-Ifta (11/358):  With regard to the land that is rented out and the real estate that is rented out, zakaah must be paid on the rent when one year has passed, not on the land or real estate itself. End quote.  But if the owner is spending the rent straightaway, then no zakaah is due on it so long as he has not saved of it the nisaab for a whole year. Secondly:  The lumber that your father owns because of his work as a contractor is not subject to zakaah.  The scholars (may Allaah have mercy on them) have stated that the tools of one’s trade are not subject to zakaah, no matter how great their value, because the purpose of having them is to use them and not to deal or trade in them.  The same may also be said of the two cars; there is no zakaah on them so long as he does not intend to trade in them.  See the answer to question no. 74987.  Thirdly:  There is nothing wrong with your father giving zakaah to your paternal aunt and her orphan children, rather it is better to give it to them and that will earn a greater reward than giving it to strangers, because giving zakaah to relatives is better.  It was narrated from Salmaan ibn ‘Aamir (may Allaah be pleased with him) that the Prophet (peace and blessings of Allaah be upon him) said: “Charity given to a poor person is charity, but charity given to a relative is two things, charity and upholding ties of kinship.” Narrated by Ahmad (15644) and al-Tirmidhi (658); classed as saheeh by al-Albaani in Saheeh al-Tirmidhi.  As for giving zakaah to your paternal aunt and her other daughter, if they have sufficient income then it is not permissible to give zakaah to them, but if their income is not sufficient then they may given of zakaah whatever will suffice them, and anything more than that is voluntary charity and upholding ties of kinship, and it is not permissible to count it as zakaah.   But if your father would inherit from your paternal aunt (his sister) – if she were to die – then he is obliged to spend on her, and in that case it is not permissible for him to give her zakaah.  And he would inherit from her if she has no male child and if her father is deceased.  See the answer to question no. 6026.  As for the fact that she and her daughter wear makeup and do not dress properly, we ask Allaah to guide them, and that does not affect the giving of zakaah to them, but what you and your father are required to do is to keep on advising them.  And Allaah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/113062/a-contractor-who-owns-real-estate-and-building-equipment-does-he-have-to-pay-zakaah

Zakaah on usurped wealth

Question I have some land that I own with official papers, but another person used deceitful methods to prove that he has ownership of it, and our case is still before the courts. One full hijri year has passed; do I have to give zakaah on this land?.

Praise be to Allah. Firstly:  If your intention was to develop the land in order to live there or to rent it out, then there is no zakaah on this land because it does not come under the heading of trade goods. Please see the answer to question no. 129787  But if your intention was to deal in it, then the basic principle is that trade goods are subject to zakaah. So the value of this land should be worked out every time one hijri year has passed, then you should pay zakaah on it according to its market value.  But because this land has been usurped and you are not able to dispose of it, there is no zakaah on it according to the more correct scholarly opinion.  Ibn Qudaamah said in al-Kaafi: With regard to usurped property, lost property and debt owed to one who cannot get it off because the debtor is in difficulty or because he denies he owes anything or he keeps deferring the payment, there are two view on this issue… etc.  Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) said: There are two opinions in our madhhab. One view is that zakaah is due on it and it is obligatory, but he does not have to give it until he takes possession of it, whereupon he should give zakaah for the past period, even if it has gone on for ten years.  The second opinion is that there is no zakaah due on that, because the wealth is not in his possession and he is not able to ask for it, and if he asks for it he will not be able to get it. This view is the correct one. End quote from ash-Sharh al-Kaafi.  Shaykh al-Islam Ibn Taymiyah (may Allah have mercy on him) said: Zakaah is not due on a debt for which repayment has been deferred, or the debtor is in difficulty or is unemployed or is denying that he owes anything, or on usurped or stolen property. This is the view of Abu Haneefah. End quote from al-Ikhtiyaaraat, p. 146  But to be on the safe side, if you regain possession of this land, you should pay zakaah for one year, even if it remained in the possession of the usurper for several years.  For more information, please see the answer to question no. 125854  And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/129657/zakaah-on-usurped-wealth

If he bought some land then sold it because he needed money, does he have to pay zakaah?

Question I read a fatwa which says that if a person buys land for the purpose of buying and selling, he has to pay zakaah on it. But what if someone bought some land and had no intention of selling it, but someone suddenly came along who wanted to buy it, so he sold it because he was pressured to do so. Does he have to pay zakaah on it? If so, how much is the zakaah? And is it based on the price he bought it for or the price he sold it for? For example, he bought it for two hundred thousand and sold it for two hundred and fifty thousand. What is the zakaah on it?

Praise be to Allah.If a person buys land with the intention of trading in it, then he has to pay zakaah when one (hijri) year has passed since he acquired the wealth with which he bought it. The way in which zakaah is worked out is: the value of the land should be worked out at the end of the year, and one quarter of one tenth (2.5%) should be given as zakaah. What matters is its value at the time of paying zakaah, not its value at the time of purchase. But if he bought land and did not intend to trade in it, then he needed to sell it, or someone offered a good price so he sold it, in this case he does not have to pay the zakaah on trade goods. But if he sells it then one year passes since he acquired the money, then he has to pay zakaah as on the rest of his wealth. Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) said: If a person has some properties that he does not want to trade, but if he is given a good price he will sell them, then they are not regarded as trade goods, because he did not acquire them with the intention of trading. If a person is offered a good price for something that he owns, in most cases he will sell it, even his house or car, and so on. And he said: If he has a car that he is using, then he decides to sell it, it is not regarded as being for trade, because in this case he is not selling it for the purpose of trade but because he no longer wants it. Another example is if he has a piece of land that he bought to build on it, then he decided to sell it and buy another piece of land, so he offered it for sale, that is not regarded as trade because the intention behind selling it in this case is not to make a profit; rather it is because he no longer wants it. End quote from ash-Sharh al-Mumti‘, 6/142 If a person has some land and is not sure whether he wants to keep it or sell it, he does not have to pay zakaah until he definitely intends to trade in it. See also the answer to question no. 117711 And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/129787/if-he-bought-some-land-then-sold-it-because-he-needed-money-does-he-have-to-pay-zakaah

Should he pay zakah on shares that were given to him by the company and over which he has no control?

Question I live in UK. My husband works for a company, which provides raw materials to other companies for making soaps, shampoos, cosmetics etc. For 3 years, he buys some company shares every month. The number of shares is doubled by the company for its employees. Few days ago, when I was browsing your website, I came to know that we’ve to pay zakah on shares. We didn’t know that before. Now I’ve some questions: 1. My husband can sell only the shares he bought with his money. The company shares can be sold only after the completion of 5 years (maturity period). Even then only the shares of first month will be mature. More shares will get matured each month. If he sells his shares now, the company shares given with those shares will be taken back from him. So, he doesn’t want to sell them now. My question is, Does he still has to give zakah on these shares? 2. Second question is, What is the nisaab of shares? 3. Third, he also has to pay tax and national insurance on these shares when he sells them. Does he have to pay zakah only on profit? 4. If we don’t have money now, can we pay it next year? 5. Do we’ve to pay for all 3 years? 6. The shares are in our joint name but only my husband deals with them, Who has the responsibility to pay zakah? I’ll be really grateful, if you can answer me in detail, I am really concerned about the issue. I don’t want any haraam money in my home

Praise be to Allah.Firstly: It is obligatory to pay zakah on shares if the owner intends to sell them and they reached the nisaab (minimum threshold). He should work out their value each year, i.e., find out their market value, and pay one quarter of one tenth (2.5%) of their value. The nisaab is the equivalent of 595 grams of silver or 85 grams of gold. As silver is of lesser value, the nisaab should be worked out on the basis of silver, so as to give the poor their fair share. So if a person owns shares the value of which is equal to the value of 595 grams of silver, then he owns the minimum amount. Secondly: If a person acquires shares with the intention of benefiting from their dividends and profits, and he does not intend to sell them, then he does not have to pay zakah on the share itself; rather he has to pay zakah on the dividends, if he has taken possession of them and one zakah year has passed; he should pay one quarter of one tenth, or 2.5%, (of the dividend). Thirdly: If the person does not have complete ownership of the shares, or he is not allowed to dispose of them, like the shares which the company has given to your husband, then he should pay zakah once when selling them or taking back their value, or when obtaining full possession of them by completing five years of work in that company. Fourthly: zakah is obligatory upon the owner; if you have shares then you must pay zakah on them, and you are responsible for that, but the husband may voluntarily pay zakah on behalf of his wife. Fifthly: The basic principle is that taxes cannot take the place of zakah; every time one full hijri year passes, you should work out the value of the shares and pay zakah of one quarter of one tenth. With regard to the double shares, if your husband will take possession of them after five years and we said that your husband should pay zakah for one year when selling them, then he should pay zakah on what remains of their price after paying taxes and National Insurance, because in fact he does not possess anything other than that. Sixthly: If a person owns shares and works out their value at the end of the year, but he does not have cash with which to pay, it is permissible for him to delay zakah until he acquires cash or sells the shares, but he has to keep a record of that and write down what he owes of zakah for the first year, the second year and so on. But it is better to hasten to pay zakah and to be quick in doing good, and to make it easy for oneself, because if the amount of zakah accumulates, he may feel reluctant to pay it. We ask Allah to bless you and to protect you from all harm. And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/174477/should-he-pay-zakah-on-shares-that-were-given-to-him-by-the-company-and-over-which-he-has-no-control

Is there any zakaah on my advertising business?

Question I have a business that produces personal invitations and commercial advertisements. I have been working in this field for nearly 10 years. Please note that it belongs to me and I have no set income per day or per month or per year. In other words, I work in this business without being able to define the monthly income, because it is freelance work. Even the departments that specialise in collecting zakaah from neighbouring commercial businesses cannot work out the monthly and annual income.  My question is:  Do I have to pay a particular rate of zakaah on this business? Please note that my capital consists of a computer and a large printer for printing advertisements. The basis of the work is physical effort and no more. If I have to pay a particular rate of zakaah for one year, how much is it or how can I work it out?.

Praise be to Allah. There is no zakaah on tools, equipment and machines in the business so long as they are not meant for sale; rather zakaah is due on fees earned by means of them, if they reach the minimum threshold (nisaab) and one hijri year has passed since that was acquired.  Al-Bahooti (may Allah have mercy on him) said in Kashshaaf al-Qinaa‘ (2/244): There is no zakaah on the tools of a craftsman, display materials used by traders, or the glass bottles used by spice merchants, grocers, and sellers of olive oil or honey, unless he intends to sell the bottles with their contents, in which case zakaah must be paid on both because these are trade goods. End quote.  The scholars of the Standing Committee for Issuing Fatwas said:  Tools used for work such as machines and other equipment are not subject to zakaah. End quote.  Fataawa al-Lajnah ad-Daa’imah, 9/362  Shaykh Ibn Baaz (may Allah have mercy on him) said:  Items that are prepared for use are not subject to zakaah, machines and so on. If they are prepared for use then there is no zakaah on them. The basic principle is that that which is prepared for sale is that which is subject to zakaah; that which is used as a tool in one’s work is not subject to zakaah. End quote from Fataawa Ibn Baaz, 14/184  Based on that:  You do not have to pay any zakaah for the equipment that you have, such as the computer, printer and other regular tools of your work. Rather zakaah is due on that which you sell, such as the paper on which the advertisements are printed and the ink used.  So at the end of the year you have to work out what you have of paper and ink, and add to that what you have of cash. If all of that reaches the minimum threshold (nisaab), which is the equivalent of 595 grams of silver, then you have to pay zakaah at a rate of 2.5%.  And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/149803/is-there-any-zakaah-on-my-advertising-business

He has a pharmacy and one full year has passed since he acquired it; how should he pay zakaah on it?

Question My brother owns a pharmacy and one year has passed. Is zakaah due on the medicines and other necessities in the pharmacy?.

Praise be to Allah. Zakaah is due on trade goods, subject to two conditions:  1.That the minimum threshold (nisaab) has been reached; 2.That one full year has passed since it was acquired, because the Prophet (blessings and peace of Allah be upon him) said: “There is no zakaah on wealth until one year has passed (since it was acquired).” Narrated by al-Tirmidhi (632) and Ibn Maajah (1792); classed as saheeh by al-Albaani (may Allah have mercy on him). Zakaah on trade goods must be paid on everything that is prepared for sale and dealing. That includes the medicines in the pharmacy and all other necessities that are sold there. As for things that are not for sale, no zakaah is due on them, such as furnishings, equipment (e.g. air conditioners and computers) and so on.  For more information please see the answer to question no. 50726.  Based on that, your brother has to evaluate the items that are sold in the pharmacy when one year has passed since he acquired the wealth with which he bought them, at the end of the year. Then he should add to that the profits made by the pharmacy that he still has, then he should pay zakaah on the total amount, at a rate of 2.5%.  It should be noted that the year in the case of trade goods starts from the time one took possession of the money with which those goods were bought, not from the date they were bought. For more information on that please see the answer to question no. 32715.  And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/143383/he-has-a-pharmacy-and-one-full-year-has-passed-since-he-acquired-it-how-should-he-pay-zakaah-on-it

Zakah on shares in a company that has not yet been launched for four years

Question I am a shareholder in a company that has not yet been launched. After nearly 4 years, the company was dissolved and they returned the capital to the shareholders with a shortfall, meaning: my share was 240,000 and they gave me back 220,000. Is zakah due on it?.

Praise be to Allah.The basic principle with regard to zakah on shares is that if the company did not pay zakah on its wealth for any reason, then the shareholders are obliged to pay zakah on their wealth. If the shareholder can find out from the company's accounts about his shares and whether the company paid zakah on its shares in the manner referred to, he should pay zakah on his shares on that basis, because it is the basic principle with regard to the way in which zakah on shares is to be paid.  If the shareholder cannot find that out:  If he bought shares in the company with the aim of benefitting from the annual dividend on the shares and not with the aim of trading in them, then the owner of these shares does not have to pay zakah on the share itself; rather he has to pay zakah on the dividend, at a rate of one quarter of one tenth after one year has passed from the day on which he took possession of the dividend.  If the shareholder bought the shares with the aim of trading in them, then he must pay the zakah of trade goods on them. When one year has passed since they came into his possession, he must pay zakah on their market value; if there is no market for them, he must pay zakah on their value as estimated by experts, paying 2.5% of this value and of any profit, if the shares made any profit. End quote from Majallat Majma’ al-Fiqh al-Islami, 1/879  If there is a problem with these shares and their owner cannot dispose of them, then he should pay zakah once, at the time of selling them or recouping their value.  Dr. Muhammad al-‘Usaymi (may Allah preserve him) was asked: O Shaykh, may Allah bless you and reward you with good, you know that there was a problem between the al-Duraybi real estate company and the government, and the shares were frozen for five years, to the point that we almost despaired, but now Allah has made things easy, and the money of the shareholders has been paid back. Does zakah have to be paid on it? For how many years should zakah be paid on it?  He replied: Yes, you have to pay zakah for one year. And Allah knows best. End quote from the Shaykh’s website.  And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/141431/zakah-on-shares-in-a-company-that-has-not-yet-been-launched-for-four-years

How to work out the zakaah for commercial companies

Question How do we work out the zakaah for commercial companies?.

Praise be to Allah. How to work out the zakaah for commercial companies that have in their possession goods in which they deal: the value of the goods that the company has – i.e., the items that have been bought with the aim of selling them – is worked out at the end of the year on the basis of the value for which they are to be sold. Then we add to that the cash that the company has in hand or in bank accounts, and debts that are owed to it by people which it is hoped will be paid off. Then from all of that one quarter of one tenth (2.5%) is paid.  If the company does not have goods in which it deals, but it undertakes projects for which it earns money, such as developing land, building homes to rent them out and not to sell, or maintenance work, then at the end of the year it should look at the money that it has and debts that are owed to it by others and that it hopes will be paid off, and it should pay one quarter of one tenth of that amount.  As for the buildings, offices, cars, furniture and equipment that are not intended for sale, rather they are used by the company, no zakaah is due on them, no matter how high their value.   And Allaah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/107754/how-to-work-out-the-zakaah-for-commercial-companies

He put his building up for sale and sold it a year later. Does he have to pay zakaah on it?

Question A man has a building which was put up for sale a year ago. Is there any zakaah due on whatever is left after paying off debts?.

Praise be to Allah.Shaykh Muhammad ibn ‘Uthaymeen (may Allaah have mercy on him) said:  If this building which was sold after one year was bought to be sold (for profit), then zakaah is due on it, on the price for which it was sold. Zakaah should be paid if one full hijri year has passed between the time when its owner decided to sell it and the sale took place. But if he did not buy it in order to sell it (for a profit), rather he no longer had any need of the house or property, and he wanted to sell it, but it took so long because he could not find anyone to buy it, then there is no zakaah due on its price, but whatever he keeps of its price after paying off his debts, once one full hijri year has passed he should pay zakaah on it, but if he spends it before the year has passed then there is no zakaah due.  In conclusion: If this property is bought for trade, then he has to pay zakaah on it when one full hijri year has passed from the time when he decided to sell it, even if it has not yet been one year since he sold it. If he did not intend to trade it, rather he no longer had any need of it but he could not find a purchaser until after a year had passed, then he does not have to pay zakaah on its price, rather he has to pay zakaah on the money he receives, when a full year has passed.  And Allaah is the Source of strength.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/10049/he-put-his-building-up-for-sale-and-sold-it-a-year-later-does-he-have-to-pay-zakaah-on-it

He has a piece of land that is the subject of a dispute with the municipality and he cannot sell it. Does he have to pay Zakaah on it?

Question I have a number of pieces of land outside the city, with no lawful documents. All I have is just few papers of purchase I bought several years ago. Do I have to pay zakat on them? What shall I do now if I have to pay zakat? Bear in mind that these pieces of land were an issue of problems with the local municipality and we cannot valuate them now.

Praise be to Allah. If you bought this land with the intention of selling it, then you must pay the zakaah on trade goods, so you must work out its value every year and pay one quarter of one tenth (2.5%) of this value.  This is the basic principle concerning zakaah on trade goods. But if you cannot sell it and dispose of it because of the dispute with the municipality, then no zakaah is due on it for the period during which you are unable to dispose of it, because you are not in full possession of it. This is akin to a debt that is owed by a person who is delaying repayment or by one who is in difficulty.  Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) was asked about zakaah on land, i.e., a man bought a piece of land but did not pay zakaah on it for three or four years. After the purchase he submitted an application to the municipality to divide it into a number of lots. This process took three or four years and until now it is not complete. Is zakaah due on it for the previous period, or should zakaah be paid just once at the time of purchase?  Shaykh: Did he buy it to trade in it?  Questioner: He bought it to trade in it, but he thought, based on the fatwa of a scholar, that no zakaah is due on land, then it took too long to complete the application, and he cannot sell it in lots until it is completed.   Shaykh: And he cannot sell as one piece either? Questioner: He cannot sell it as one piece, but the partners bought the land to divide it into a number of lots.  Shaykh: Meaning that it is no longer in his possession?  Questioner: No, it is still in his possession.  Shaykh: Are they partners?   Questioner: Partners means that they recorded the name of one person, one of the partners.  Shaykh: Firstly, may Allaah bless you, if he asked someone about whether there is no zakaah on it, and that person is reliable in his knowledge and religious commitment, then he does not have to pay zakaah, because Allaah says (interpretation of the meaning): “So ask of those who know the Scripture, if you know not” [al-Nahl 16:43]. But if he believed that zakaah is obligatory then he must pay zakaah, except for the years when he was unable to dispose of it, as there is no zakaah for those years, because this is like a debt owed by one who is in difficulty. But the correct view as far as I know is that trade goods are subject to zakaah. End quote from Liqa’ al-Baab al-Maftooh (11/148). And Allaah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/117936/he-has-a-piece-of-land-that-is-the-subject-of-a-dispute-with-the-municipality-and-he-cannot-sell-it-does-he-have-to-pay-zakaah-on-it

He has invested money in the investment fund; how should he pay zakaah?

Question I have investment funds in a bank. Do I have to pay Zakah on this amount? How much must I pay if yes? Should I calculate Zakah on the whole amount or only on the profit?.

Praise be to Allah.Firstly:   Zakaah on investments varies according to the intention of the owner.  If he invested in the company with the aim of benefiting from the annual profit on the shares, and not with the intention of dealing in them, then no zakaah is due on the shares themselves, rather he must pay zakaah on the yield, at a rate of one quarter of one tenth after one full hijri year has passed since he took possession of the yield.   But if the shareholder bought the shares with the intention of dealing in them, then the zakaah is the same as zakaah on trade goods. When the hijri year has passed since the shares came into his possession, he must pay zakaah on their market value, at a rate of 2.5% of that value and of the profit if the shares have made any profit. End quote from Majallat Majma’ al-Fiqh al-Islami (1/879).  Secondly:  If you bought shares with the aim of making profit only, and you paid 2.5% of the profits with the intention of paying zakaah, and you gave it to an organization to distribute it on your behalf, that is sufficient, but you should make sure that this organization has paid the zakaah. If you had taken the money and distributed your zakaah yourself, that would have been better.  But if you bought shares with the intention of trading in them, then you must work out their value at the end of the year and pay zakaah on it at a rate of 2.5% of their value.  And Allaah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/110144/he-has-invested-money-in-the-investment-fund-how-should-he-pay-zakaah

Does zakah have to be paid on all bought land?

Question We bought 3 pieces of land, one of them we intend to build on it soon. The other two pieces we intend to just keep them in order to sell or use them in the future. Six years passed and we did not pay Zakah on any of the three pieces. What shall we do? And how much should we pay?.

Praise be to Allah.When a person buys land, one of three scenarios must apply:  1 – That which is intended for living on. This is not subject to zakah, because it is not for trade or business.  2 – He buys the land with the aim of selling it and seeking to make a profit from it. This comes under the heading of trade goods if one full (hijri) year passes. Then he should see how much it is worth when the year has passed, and pay one quarter of one tenth of its value at the time when the year has passed.  3 – When he wants the land that he buys as an investment, so that he can develop it by building shops or apartment buildings to rent them out. No zakah is due on the land itself, rather zakah is due on its revenue. If he receives in rent money that passes the nisaab (minimum threshold), and one year has passed since the rental contract was drawn up, then he must pay zakah on it. End quote.  Al-Muntaqa min Fatawa al-Fawzan (2/309).  And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/105303/does-zakah-have-to-be-paid-on-all-bought-land

If the land does not sell, is zakah due on it?

Question I have bought some land, intending to sell it when its value increases. But its value decreased and it did not sell, it remained in my possession for 10 years and its value did not increase, should I pay Zakah on it?.

Praise be to Allah.Land that is bought with the intention of selling it after a while when prices have increased is subject to zakah, because it comes under the heading of trade goods.  The value of trade goods should be worked out at the end of the year based on the current market price, regardless of the price for which they were bought, and zakah must be paid. The rate of zakah is one quarter of one tenth.  See the answer to question no. 38886.  Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) was asked: I have a piece of land and I am waiting for the prices of land to go up so that I can sell it, and it has been several years. Should I pay zakah on it?  He replied: If a person buys land to make a profit then the land does not sell and becomes cheaper, and he keeps it until the price goes up, then he must pay zakah on it every year, because it comes under the heading of trade goods. If he does not have anything with which to pay the zakah, and he cannot find a buyer, then he should work out its price at the time when zakah becomes obligatory and work out its zakah, and in the following year he should work out the zakah on its value, then in the third year and so on. Then whenever he sells it he should pay the total amount of zakah that he had calculated. End quote.  Majmoo’ al-Fataawa (18/225).  He was also asked about a person who bought some land with the aim of trading in it, but it remained in his possession for a number of years. Does he have to pay zakah on it?  He replied: If a person buys land for trading, then he has to pay zakah every year, whether the value increases or decreases, and whether it sells quickly or it does not sell. He should work out its value every year at the current market price, then if he has money he should pay its zakah from the money that he has, and if he does not have any money he should work out the zakah for each year, and when he sells it he should pay the zakah for the past years. End quote from Liqa’ al-Baab al-Shahri (15/12).  And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/105334/if-the-land-does-not-sell-is-zakah-due-on-it

It is not permissible to estimate anything other than fruits

Question Is it permissible to estimate trade goods when it is not possible or is too difficult for the businessman to count them accurately?.

Praise be to Allah. What is meant by estimating is when experts look at the date palms – for example – after it is clear that the unripe dates are in good condition, and they see how many dates they are likely to produce, and the zakaah is given on that basis. This is a kind of speculation and conjecture without precisely counting the wealth. The reason why this is prescribed in the case of fruits is that the owner of the fruit may need to eat some of it or give it to others or sell it when it is still unripe, before it ripens. In that case it is not possible to define zakaah precisely, so Islam allows estimating it so as to avoid hardship and difficulty.  There is no report that sharee’ah allows estimating with regard to any kind of wealth other than fruits, because fruits are the type of wealth which it is difficult or impossible to count precisely. But with other types of wealth that are subject to zakaah – such as trade goods – it is possible to count them precisely.  Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) was asked about estimating trade goods if it is impossible or too difficult for the businessman to count them. He replied:  It is not permissible to estimate them, because estimating was mentioned only with regard to fruits, and some scholars also added crops. As for other types of wealth, it is not possible to estimate them because they are of many types. But the person should try hard as hard as he can and be cautious. If he counts this item as being one hundred and twenty, he should pay zakaah on one hundred and twenty, so that he will have done his duty. End quote.  Majmoo’ Fataawa al-Shaykh Ibn ‘Uthaymeen (18/232). And Allaah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=2

https://islamqa.info/en/answers/105319/it-is-not-permissible-to-estimate-anything-other-than-fruits

Zakaah on shares

Question I work in the field of buying and selling Saudi shares, and the way I work is that I sell the share as soon as the price rises and I am able to make a profit, and I do not wait for reports about the companies’ profits.  My question is: I bought some shares in the electrical company five months ago for 172 riyals per share. After I bought them, they went down to 147 riyals and have not yet gone back up to the purchase price. Is there any zakaah due on these shares? How should the zakaah be paid? Is it based on the purchase price or the current price which is 147?.

Praise be to Allah. These shares are now regarded as trade goods, because trade goods are anything that is prepared for sale. So zakaah is due on them.  The zakaah on trade goods is worked out on the basis of their value at the end of the year, whether it is more than the purchase price or less.  See question no. 65515  Based on this, if these shares reach the nisaab, or they reach the nisaab when added to the cash money that you have, then you should pay zakaah on them according to their value on the day when the year ends.  Shaykh Ibn ‘Uthaymeen said:  The way in which zakaah is paid on shares in companies is as follows: if the state undertakes the mission of calculating and collecting the zakaah, then you have discharged your responsibility, otherwise zakaah must be paid in the following manner: they should be evaluated every year and one-quarter of one-tenth should be paid, if the purpose of them is to trade. But if the purpose is investment, then no zakaah is due on them, but zakaah is due on any profits they produce if it is in the form of money and one year has passed. End quote.  Majmoo’ Fataawa Ibn ‘Uthaymeen, 18/196  The Standing Committee was asked: Is there any zakaah on shares and certificates? How should it be paid?  They replied:  Zakaah is due on shares and promissory notes if they represent money or trade goods, so long as the one who is keeping the money is not going through hardship or delay payment unduly. End quote.  Fataawa al-Lajnah al-Daa’imah, 9/354 The Standing Committee was also asked about shares through which one buys land and real estate.  They replied:  The shares mentioned in the question are a kind of trade goods, so zakaah must be paid on them, to be evaluated every year according to their current value, not the purchase price. If the owner has money he may pay from that, otherwise he should pay the zakaah for past years from their value after selling them and taking the money. End quote.  Fataawa al-Lajnah al-Daa’imah, 9/353  Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) was asked: Should zakaah on shares be based on the official value of the share or on the market value, or what?  He replied:  Zakaah on shares and other trade goods should be based on the market value. If it was worth one thousand at the time of purchase, then the value rises to two thousand at the time when zakaah becomes due, then zakaah should be based on the value of two thousand, because what matters is the value of a thing when zakaah becomes due, not when it is bought. End quote.  Majmoo’ Fataawa Ibn ‘Uthaymeen, 18/197  It should be noted that if trade goods are bought with gold or silver or cash (riyals, dollars or other currencies), or with other goods, then the year for those goods starts from the time when one acquired the wealth with which one bought them. Based on this, the new year does not start from the time when one takes possession of the new goods, rather it starts from the time when one acquired the wealth with which one bought them.  See question no. 32715  And Allaah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=3

https://islamqa.info/en/answers/65722/zakaah-on-shares

Zakah on shares in real state companies

Question Is zakah due on shares in real estate companies?.

Praise be to Allah.In the answer to question no. 69912 we have discussed the zakah on shares in detail, including when it is due and when it is not due.   With regard to shares in real estate companies, one of the following two scenarios must apply:   1 – The companies buy land in order to build on it or make use of whatever buildings are on it to rent them out, for example, so there is no zakah on these shares, rather zakah is due on the profits only, if they reach the nisaab and one year has passed, because these lands and properties are not subject to zakah, rather zakah is due on their returns or income if it reaches the nisaab and one year has passed.  But it should be noted that these companies’ reserves are bound to contain cash and funds in the bank, and this money is subject to zakah, so it is essential to know what proportion of these funds each share represents, and pay zakah on it each year.  2 – Or the companies buy properties – land or buildings – with the aim of trading in them. These shares are regarded as trade goods, so zakah is due on them and on their profits. So zakah must be paid according to their value each year, plus their profits. This is the usual activity of real estate companies.  Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) was asked about a man who bought shares in a piece of land belonging to a real-estate company. Many years have passed – how should he pay zakah on that?  He replied: It would seem that these shares are trade goods, because those who buy shares in land intend to trade them and earn from them, hence they have to pay zakah on them every year, by working out their value and paying zakah. So if a person has thirty thousand shares and at the end of the year they are worth sixthy thousand, he has to pay zakah on sixty thousand. If at the end of the year the thirty thousand is worth only ten thousand, then he only has to pay zakah on ten thousand. Based on this, the questioner has to work out the zakah for every year, and he should pay zakah for each year. But if these shares have not yet been sold, he should pay zakah on them when they are sold. But no one should be negligent, rather he should sell them for whatever Allah decrees, and then pay the zakah on them."(Majmoo’ Fatawa Ibn ‘Uthyameen, 18/226)  The scholars of the Standing Committee for Issuing Fatwas were asked about a man who bought shares in a piece of land, then sold them after five years. How should he pay zakah on them?  They replied:  He should pay zakah for each of the four previous years, according to their value each year, whether he made a profit or not, and he should pay zakah on the profit and on the capital for the last year."(Fatawa al-Lajnah al-Daa’imah, 9/350) This applies whether the company sells the land as it is or builds on it and then sells it.  Shaykh Ibn ‘Uthaymeen was asked about a man who buys land and, at the time of purchasing, intends to sell it when it has been built on. After the building is completed, he offers it for sale, and after receiving its price, he buys more land and so on. Does he have to pay zakah in this case?  He replied:  The zakah on trade goods is due on this land, because he has bought it in order to make a profit from it, and it makes no difference whether he intends to sell it before developing it or afterwards. This is like one who buys fabric in order to make a profit from it after sewing it into garments."(Majmoo’ Fatawa Ibn ‘Uthaymeen, 18/227).

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=3

https://islamqa.info/en/answers/74989/zakah-on-shares-in-real-state-companies

I have a share in some land – how should I pay zakaah on that share?

Question A man bought a share of some land belonging to a property company. Many years have passed since then. How should he pay zakaah on it, knowing that his share is worth thirty thousand riyaals?.

Praise be to Allah.Shaykh Muhammad ibn ‘Uthaymeen (may Allaah have mercy on him) said:  It seems to be the case that this share is a kind of trade goods, because those who buy shares in land intend to trade them and make money. Hence they have to pay zakaah on them every year, by calculating their value and then paying zakaah.  If he bought a share of thirty thousand, and after one year has passed this share is worth sixty thousand, then he must pay zakaah on sixty thousand. If after one year has passed the thirty thousand is now worth only ten thousand, then he only has to pay zakaah on ten thousand. Based on this, the questioner should pay the zakaah for each year that he did not pay zakaah. But if these shares have not been sold until now, then if they are sold he should pay the zakaah. But no one should take this matter lightly, rather he should sell them for whatever price he can get, and then pay the zakaah.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=3

https://islamqa.info/en/answers/42239/i-have-a-share-in-some-land-how-should-i-pay-zakaah-on-that-share

Zakah on stagnant real estate shares

Question I have invested in a property more than 3 years ago. This investment was not fruitful, until now. What is the ruling of Zakat, knowing that it is not sure that I will get the capital money back? Should I pay Zakat for the whole three years, or for only one year, knowing that this investment lasted for 8 months?.

Praise be to Allah.Zakah on real estate shares should be paid as zakah on trade goods, because these real estate companies buy land with the aim of trading in it. When the year ends, you have to work out the value of your shares in this company and pay zakah on them at a rate of one quarter of one tenth. The year begins from when you took possession of wealth that reached the nisaab, with which you bought these shares. Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) said concerning land that belongs to a real estate company: These shares are trade goods, it seems, because those who buy shares in land intend to trade and earn money from it. Hence they have to pay zakah on it every year, by working out its value, then paying zakah. So if he bought shares for thirty thousand and at the end of the year these shares are worth sixty thousand, then he has to pay zakah on sixty thousand. If at the end of the year the thirty thousand is worth only ten thousand, then he only has to pay zakah on ten thousand. End quote from Majmoo’ Fataawa Ibn ‘Uthaymeen (18/226). He (may Allah have mercy on him) was also asked about a person who bought land with the aim of trading it, but it remained in his possession for a long time. Does he have to pay zakah on it? He replied: If a person buys land to trade it then he has to pay zakah on it every year, whether its value increases or decreases, and whether he manages to sell it or not. He should work out its value every year, then if he has money he can pay the zakah from the money that he has. If he does not have money then he should keep a record of the zakah that is due every year, and when he sells it he should pay the zakah for the past years. End quote from Liqa’ al-Baab il-Maftooh (15/12). But if the land or shares do not sell, and the owners put them up for sale but do not find anyone to buy them, then some of the scholars think that in this case it is like a loan that was given to a poor person who cannot afford to pay it off; zakah is not due on it until it is sold, and he should pay zakah for one year only. But in order to be on the safe side, he should pay zakah for all years. See: Majmoo’ Fataawa al-Shaykh Ibn ‘Uthaymeen (18/206). And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=3

https://islamqa.info/en/answers/97124/zakah-on-stagnant-real-estate-shares

He has put his car up for sale but he is using it for now until he finds the right price. Does he have to pay zakah?

Question A person has a car on sale until he finds a suitable price. But he still is using it. Shall he pay Zakat on it if it completes a year in this case?.

Praise be to Allah.The majority of scholars are of the view that it is obligatory to pay zakah on trade goods, subject to two conditions: 1 – That he should have taken possession of it through his own actions, i.e., by buying it or accepting it as a gift, not by inheritance, because inheritance comes under the heading of things that a person acquires involuntarily. 2 – That he took possession of it with the intention of selling it. If he took possession of it with the intention of keeping it, then decided to sell it, he does not have to pay zakah. Ibn Qudaamah (may Allah have mercy on him) said: An item is not regarded as trade goods unless two conditions are met: 1 – That he should have taken possession of it through his own actions, either by buying it or accepting it as a gift. It makes no difference whether he took possession of it in return for payment or not. 2 – He should intend at the time of taking possession of it that it is for trade. If he did not intend at the time of taking possession of it that it was for trade, then it is not trade goods even if he formed that intention afterwards. End quote from al-Mughni (2/336). Some scholars are of the view that it becomes trade goods when he forms the intention, even if he did not taken possession of it through his own actions. This was narrated from Ahmad (may Allah have mercy on him). Ibn Qudaamah said, after the words quoted above: It was narrated from Ahmad in another report, that goods become trade goods as soon as one forms the intention to sell them, because of the words of Samurah (may Allah be pleased with him): The Messenger of Allah (peace and blessings of Allah be upon him) commanded us to pay zakah on that which we prepared for sale. Based on this, it makes no difference whether he took possession of it through his own actions or whether it was in return for payment or not, rather when he forms the intention to sell them, they become trade goods. End quote from al-Mughni (2/336). The first view is the opinion of the Hanbalis, Hanafis, Maalikis and Shaafa’is. See: Badaa’i’ al-Sanaa’i (2/12); Sharh al-Kharashi ‘ala Khaleel (2/195); al-Majmoo’ (6/5) and al-Mawsoo’ah al-Fiqhiyyah (23/271). Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) preferred the second view, which was also narrated from Ahmad, but he differentiated between selling a car or land in order to earn money and make a profit, and selling them because one no longer needs them. In the first case zakah is due, but not in the second. Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) said: The second view concerning this issue is that it becomes trade goods by intention even if he did not take possession of it through his own actions, and even if he took possession of it with no intention of selling it, because of the general meaning of the words of the Prophet (peace and blessings of Allah be upon him): “Actions are but by intention and each person will have but that which he intended.” This man formed the intention to sell it so it is trade goods. For example, if he buys a car for his personal use, then he decides to use it as capital for business. In this case he must pay zakah when one year has passed since he made that decision. If he has a car that he is using then he decides to sell it then it is not trade goods, because in this case he is not selling it for trade, but because he no longer wants it. Another example is if he has land that he bought to build on, then he decided to sell it and buy a different piece of land, so he put it up for sale. This is not regarded as trade goods, because the decision to sell in this case is not to use it to raise capital but because he no longer wants it. There is a difference between the person who uses it to raise capital for business and a person who no longer wants this thing and wants to sell it. In the first case zakah is due according to the most correct opinion, but no zakah is due in the second case. End quote from al-Sharh al-Mumti’ (6/143). To sum up: If you are selling the car because you no longer want it, then there is no zakah on it, but if it is in order to do business, earn money from it and make a profit, then you have to pay zakah when one year has passed since you decided to trade in it. That is not affected by the fact that you are not using it. And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=3

https://islamqa.info/en/answers/95761/he-has-put-his-car-up-for-sale-but-he-is-using-it-for-now-until-he-finds-the-right-price-does-he-have-to-pay-zakah

How should he pay zakaah on a car if it stayed in the showroom for three years and its price has fallen?

Question Someone bought a car for 13,000 riyals with the intention of offering it for sale and making a profit. But after he bought it, he found out that it was faulty, which lessened its value, and he left it in a car showroom, where it stayed for three years, and offers were made on it that were much less than the purchase price during that time. After three years, he sold it for 8,000 riyals. Was there any zakaah due on this car that was offered for sale for three years every time one year passed? How should he pay it? What is the rate of zakaah?.

Praise be to Allah.If a person buys a car with the intention of selling it and making a profit, he must pay zakaah on it every time a year passes. He should work out its value on that day, i.e., its market value on the day when the year has passed, and pay one-quarter of one-tenth (2.5%), whether the value has increased or decreased.  Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) was asked: Someone bought some land with the intention of dealing in it, but it remained in his possession for a long time. Is zakaah due on it?  He replied:  If a person buys land with the intention of dealing in it, then he must pay zakaah on it every year, whether its value increases or decreases, and whether it sells or not. He should work out its value every year, then if he has money he may pay the zakaah from the money he has; if he does not have money he should keep a record of the zakaah that it due every year, year by year, and when  he sells it he must pay zakaah on the past period. End quote from Liqa’ al-Baab il-Maftooh (15/12).  Based on this, the owner of the car should have looked at its price at the end of every year and paid zakaah on it. If he did not have any money, he should have kept a record of it and paid it when he sold the car.  It should be noted that the year with regard to trade goods is the year from when one acquired the wealth with which he bought them, if it reached the nisaab (minimum threshold). The year for the car in this case does not start from the time when he bought it, but from the time when he acquired the money with which he bought it.  What the owner of the car must do now is work out what the value of the car was at the end of each year, with the help of those who have experience in the market, then pay the zakaah.  And Allaah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=3

https://islamqa.info/en/answers/94473/how-should-he-pay-zakaah-on-a-car-if-it-stayed-in-the-showroom-for-three-years-and-its-price-has-fallen

He inherited some land then he put it up for sale – does he have to pay zakaah on it?

Question We have a piece of land that we sold one month ago. This land belonged to a number of heirs, one of whom was a minor and reached the age of 18 one month before the land was sold. We decided to sell it a year before that date, but the issue of the minor heir meant that the sale was delayed until this year. Please note that we did not give the land to any agent to sell it and we did not come to any agreement with any purchaser at that time, rather we delayed it until that minor reached the legal age. My question is: Is there any zakaah on this land, knowing that it had been in the name of the heirs for 16 years but they had no intention of selling it until this year?.

Praise be to Allah.There is no zakaah on this land, because the majority of fuqaha’ are of the view that for zakaah to be due on trade goods, a person must take possession of them with the intention of trading them. If he acquires it by means of inheritance he has not taken possession of it by means of his actions, so there is no zakaah on it even if he intends to sell it.  Ibn Qudaamah (may Allaah have mercy on him) said: Goods do not become trade goods unless two conditions are met:   (i)That he takes possession of it by means of his actions, such as buying, marriage, khula’, accepting a gift, a bequest, booty, or earning of permissible things. (ii)That he intends when taking possession of it to sell it. If he does not intend when taking possession of it to sell it, then it is not trade goods, even if he forms that intention later on. If he takes possession of it by inheritance and intends to sell it, it does not become trade goods. Similarly, if a settled person intends to travel, the rulings on travelling do not begin to apply to him unless he takes action.   It was narrated from Ahmad in another report that goods may become trade goods by virtue of intention, because Samurah said: The Messenger of Allaah (peace and blessings of Allaah be upon him) commanded us to pay zakaah from that which we had prepared to sell. Based on this, when a person forms the intention to sell it, it becomes trade goods. End quote from al-Mughni, 2/336.   The former is the view of the Hanbalis, Hanafis, Maalikis and Shaafa’is.  See: Badaa’i’ al-Sanaa’i’, 2/12; Sharh al-Kharashi ‘ala Khaleel, 2/195; al-Majmoo’, 6/5; and al-Mawsoo’ah al-Fihqiyyah, 23/271.  With regard to the latter view, which was also narrated from Ahmad, it was regarded as more correct by Shaykh Ibn ‘Uthaymeen, but he differentiated between one who sells land in order to earn money, make a profit and deal in it, and one who sells it because he no longer has any need for it. In the former case zakaah is due, but not in the latter.  Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) said: The second view concerning this issue is that as soon as the intention to sell it for trade purposes is formed it becomes trade goods, even if it came into his possession without him taking any action, and even if he took possession of it without intending to trade in it, because of the general meaning of the words of the Prophet (peace and blessings of Allaah be upon him): “Actions are but by intentions, and each person will have but that which he intended…” This man intended to deal in it, so he has to pay zakaah on it.  For example: if he buys a car to use it for transportation, then he decided to make it capital for the purpose of trade, then zakaah must be paid when one year has passed since he formed that intention. But if he has a car that he is using, then he decides to sell it, it is not trade goods, because he is not selling it for the sake of doing trade, rather it is because he no longer wants it.  Another example is if he has land that he bought to build on, then he decided to sell it and buy some other land. His offering it for sale is not for the purpose of trade, because the intention of selling in this case is not to earn money, rather it is because he no longer wants it. There is a difference between two people, one of whom makes it his capital for the purpose of trade and another who decides he no longer wants or needs this thing, so he wants to sell it. In the first case zakaah is due according to the correct opinion, and in the second case no zakaah is due. End quote from al-Sharh al-Mumti’ (2/626).  Conclusion: You do not have to pay zakaah, according to both opinions.  And Allaah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=3

https://islamqa.info/en/answers/93126/he-inherited-some-land-then-he-put-it-up-for-sale-does-he-have-to-pay-zakaah-on-it

He deals in an’aam animals and in some cases one full hijri year has not yet passed. How should he pay zakaah on them?

Question I have a rare type of goat, namely the Syrian goat, and it is an expensive kind, the price of some of which may reach 50,000 riyals. I keep them and sell their offsrping and I buy and sell them, and in some cases I do not keep them for a full hijri year. Raising them costs money for feed and veterinary care, and they are kept in a shed and do not go out and eat vegetation. I hope you can advise me whether zakaah is due on them and how it should be calculated; are they regarded as an’aam animals or trade goods?.

Praise be to Allah.Firstly:  The majority of scholars are of the view that no zakaah is due on an’aam animals (i.e., camels, cattle, sheep and goats) unless they graze freely on grass in the pasture and one full hijri year has passed for all of them or most of them. But if they are fed and their owner spends money on their feed, no zakaah is due on them, unless their owner intends to trade in them – as is mentioned in your question – in which case they are subject to the zakaah on trade goods.  So these goats that you have are not subject to the zakaah on an’aam animals, rather they are subject to the zakaah on trade goods.  See more details in the answer to question no. 40156.  Secondly:  It should be noted that some people make a mistake with regard to the beginning of the year for zakaah. They think that it is the moment when they buy the trade goods, but that is not correct. Rather the year for trade goods is when the year from when one acquired the money with which one buys them has passed, if that money reaches the nisaab (threshold).  What this means is that if a person buys trade goods – such as goats that are fed etc – with gold or silver or cash that reaches the nisaab, then the year starts from the time when he took possession of that gold or silver or cash. Similarly, if he buys goats in return for a car that he trades, the year for the goats is the year from when he acquired the car.  The reason for that is that in trade you buy and sell, and exchange money or goods, and if the year is not based on the wealth which came before, there would be no zakaah on trade goods.  Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) said, explaining this issue: If a person buys trade goods with money that reaches the nisaab, such as a man who has two hundred dirhams, and during the year he buys trade goods with it, the year does not start when he buys the good, rather it is based on the first, because the year for trade goods is to be based on the first.  Another example is if a man has one thousand riyals of which he takes possession in Ramadaan, then in Sha’baan of the following year he buys some trade goods. When Ramadaan comes, he must pay zakaah on those trade goods, because the year for trade goods is based on the year for the money with which they are bought.  The same applies if he trades goods that reach the nisaab for other goods. For example, a man has a car, and during the year he trades it for another car for the purpose of trade. The year should be based on the first car, because what is sought is its value, not the difference in the two products, and he did not buy the second car to use it, rather he wanted it so that he could trade it. End quote from al-Sharh al-Mumti’.  Based on this, if you took possession of ten thousand, for example, in Ramadaan, then you bought goats with it in Dhu’l-Hijjah, and you started to sell them or their offspring, and buy others, the year for zakaah is in Ramadaan. You have to work out the value of the goats that you have each year, then add to that the cash that you have, and pay zakaah on the total at a rate of one-quarter of one-tenth.  The year for zakaah will continue to be in Ramadaan unless the amount falls below the nisaab during the year, such as if a person sells what he has in Safar, for example, and he puts the money into buying land or a house to live in, then Allaah blesses him with wealth during Rajab, so he buys more goats to trade. Then the year for trading will start in Rajab.  And Allaah knows best.

Zakah urood al tijaarah zakah on trade goods

https://islamqa.info/en/categories/topics/105/zakah-urood-al-tijaarah-zakah-on-trade-goods?page=3

https://islamqa.info/en/answers/78842/he-deals-in-anaam-animals-and-in-some-cases-one-full-hijri-year-has-not-yet-passed-how-should-he-pay-zakaah-on-them

He lent money to some of his colleagues and bought shares in some companies – how should he pay zakaah?

Question I borrowed 260,000 riyals from al-Bank al-‘Arabi by means of tawarruq, on the basis that they would deduct 3752 riyals from my salary every month for 8 years, and the money would be deposited in my account. Then I bought a car, paid off my debts and lent money to some of my colleagues, and I invested in real estate and I began to invest the rest in the Saudi stock market. That was approximately one year ago. Do I have to pay zakaah? If that is the case, how should I pay zakaah with regard to those to whom I lent money and with regard to the shares that I own in the stock market?.

Praise be to Allah. Firstly:  The debt that you owe to the bank does not mean that your duty to pay zakaah is waived, according to the most correct scholarly opinion. This has been discussed in the answer to question no. 22426.  Secondly:  It is not right to take out a loan in order to invest in the stock market, especially if the loan is large as in your case. Debt is a great responsibility, so much so that if a martyr is killed in battle for the sake of Allaah he will be rewarded for everything except debt. In the answer to question no. 82011we have quoted the words of Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) warning against taking loans in order to invest in stocks.  Thirdly:  Zakaah is due on that which you have lent to your colleagues, if they still acknowledge the debt and they are paying it off as agreed. You have to pay zakaah on this money every time one year passes from the time when you took possession of the nisaab (minimum threshold of wealth at which zakaah becomes due), but you have the choice between two things: either paying zakaah on it every year, or delaying it until you get this money back, then paying zakaah for all past years.  But if the debtor is in difficulty or taking a long time to pay it back, then you do not have to pay zakaah until you get the money back, then when you get it you have to count a new year from the time when you get it. This has been discussed in the answer to question no. 50014.  Fourthly:  With regard to investing in property this comes under the heading of trade goods, because these real estate companies buy land with the aim of dealing in it.  So at the end of the year you have to work out the value of your shares in this company and pay zakaah on them, one quarter of one tenth.  Shaykh Ibn ‘Uthaymeen (may Allaah have mercy on him) said concerning shares in land belonging to a real-estate company:  It seems that these shares are trade goods, because those who buy shares in land intend to deal in it and earn money from it. Hence they must pay zakaah on it every year, by working out their values and paying zakaah accordingly. If a person has shares worth thirty thousand and at the end of the year these shares are worth sixty thousand, then he must pay zakaah on sixty thousand, and if at the end of the year the thirty thousand is worth only ten thousand, then he only has to pay zakaah on ten thousand. End quote.  Majmoo’ Fataawa Ibn ‘Uthaymeen (18/226).  Fifthly:  With regard to the money that you have invested in the stock market, if your intention when buying the shares was to deal in them – as seems to be the case – then these shares are regarded as trade goods, so when the year ends you must work out the value of the shares based on the market value and pay zakaah on them. End quote.   But if you bought the shares to keep them and benefit from their annual profits, then the way of paying zakaah in this case has been explained in the answer to question no. 69912.  And Allaah knows best.

Zakah urood al tijaarah zakah on trade goods

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https://islamqa.info/en/answers/87810/he-lent-money-to-some-of-his-colleagues-and-bought-shares-in-some-companies-how-should-he-pay-zakaah

He is asking about paying zakah on the profits of a company only

Question   I am the owner of a small company that designs and manufactures decorative glass. My question has to do with paying zakah. I pay zakah on the net profits after deducting taxes, which reach a rate of 30%. Is paying it in this manner correct?  I got confused about my situation after I heard from some of the brothers that this is not correct. Please note that the way my company works is that we make a contract with a customer to design and manufacture some domes or windows made of coloured glass, then we import the raw materials such as glass, lead, tin solder etc from abroad. We bring it to our warehouse where we use it for manufacturing, and some of it remains and is counted among our stock at the end of the financial year, when we do our stocktaking and the finance department publishes the budget showing the profits for that year, on which the payment of zakah is based.  My question is:  Should zakah be paid on the net profits, or on the capital?  Or should it be paid on the assets of the owner that are listed in the budget issued by the finance department?  Are the taxes – which are taken from the profits and paid to the department of zakah and income – regarded as a kind of zakah?  I hope that you can tell me the right way of paying zakah, because I am confused about my situation. I pray that Allaah will guide me to the right way so that I can correct any mistake that I may have made in the past or so that I can put my mind at rest if what I have done is correct.

Praise be to Allah.We ask Allah to reward you with good for your keenness to ask about the rulings of your religion. What every Muslim should do is to ask about the rulings of his religion without any delay or hesitation. The answer to your question is:  Firstly:  This company of yours is a manufacturing and commercial company, and manufacturing and commercial companies must pay zakah on trade goods, but there is no zakah on the tools, materials, vehicles, buildings and furnishings that are intended to be used and not to be sold for profit.  See question no. [74987] and [69916]  Based on this, the way in which your zakah is to be worked out at the end of the year is:  You should calculate what the company has in its stores of materials that were bought with the aim of selling them. That includes the “glass, lead, solder etc”. Its value should be calculated at the end of the year, regardless of the price for which it was bought.  To that should be added the cash that is kept in the company or in the bank.  To that should be added the debts that people owe you and which you expect will be repaid. Then you should pay zakah on the total at a rate of 2.5%.  Secondly:  With regard to the company’s profits throughout the year, these profits may be divided into two types:  1 – Profits that result from the sale of glass to customers  These profits are subject to zakah, and a new year should not be started for them, rather the year for them starts when the capital with which they are bought was acquired, if it reaches the nisab.  Al-Mughni, 4/75  2 – Profits that result from the assembly process itself (i.e., they may be regarded as payment for assembly and manufacturing). zakah is due on these profits if they meet the nisab and one year has passed since they were acquired.   It may be difficult in practical terms to differentiate between these two types of profit, hence it is better to pay zakah on the entire profit at the end of the year as based on the capital. Whatever is profit on trade goods, you will have paid its zakah at the proper time (i.e., after a year has passed) and whatever is payment for the work, you will have paid its zakah in advance, and paying zakah ahead of time is permissible.  Thirdly: There is no zakah on profits that are spent during the year and which do not remain at the end of the year.  Fourthly:  The year of trade goods for a company does not start from the date the company was first established or from when the raw materials were purchased, rather it starts from when the money with which the raw materials were purchased was acquired.  For example: if you first acquired the nisab in Muharram, and the company was founded in Rajab, and you bought the raw material and started work in Ramadaan, the year for the trade goods starts in Muharram, not in Ramadaan.  Shaykh Ibn ‘Uthyameen (may Allah have mercy on him) said: Note that the year for trade goods does not end one year after they were bought, rather it is one year after the original wealth was acquired. Because it is it is another form of money which is part of your capital, where you have changed it into trade goods, so the year starts with the acquisition of the original wealth."(Majmoo’ Fatawa Ibn ‘Uthaymeen, 18/234) See also the answer to question no. 32715  Fifthly:  With regard to calculating zakah after deducting taxes:  If the taxes are deducted and paid before the end of the year (i.e., the year for zakah purposes), then what you are doing is correct, because the money that has been paid has not been with you for a year.  But if they are paid after the year is over, then it is more on the safe side to pay zakah on it; the fact that this money is taken wrongfully from you does not mean that zakah is waived.   Sixthly:  As for regarding taxes as part of zakah, that is not permissible, because zakah is to be spent in specific ways as defined by Allah, may He be exalted, in the verse (interpretation of the meaning):  “As-Sadaqaat (here it means zakah) are only for the Fuqaraa’ (poor), and Al‑Masaakeen (the poor) and those employed to collect (the funds); and to attract the hearts of those who have been inclined (towards Islam); and to free the captives; and for those in debt; and for Allah’s Cause (i.e. for Mujaahidoon — those fighting in a holy battle), and for the wayfarer (a traveller who is cut off from everything); a duty imposed by Allah. And Allah is All-Knower, All-Wise” [al-Tawbah 9:60] Taxes are not spent in these ways. Moreover, governments do not take taxes on the basis that they are zakah.  The scholars of the Standing Committee said:  The fact that taxes are on a property does not mean that zakah should not be paid, and that does not waive the duty to pay it on the income earned through that building, if it reaches the nisab and one year has passed."(Fatawa al-Lajnah al-Daa’imah, 9/339) See also question no. 2447  The scholars of the Standing Committee were also asked:  What do you say about the manner of paying zakah? I own a shop that sells lumber and one year has passed for the products that are in the store. There are debts connected to the products in the store, as the purchasers have paid some of the price and the rest is to be paid at a later date. There are also annual expenses such as the rent for the store, annual fees, taxes, insurance, and employee salaries.  They replied:  zakah must be paid on the products that are offered for sale, such as the lumber etc, if its value reaches the nisab by itself or when added to whatever cash or other trade goods you have, and one year has passed. As for the debts, rent, fees, etc, these do not mean that it is not obligatory to pay zakah."(Fatawa al-Lajnah al-Daa’imah, 9/348) Seventhly:  With regard to zakah for past years, you have to work out the zakah for every year and pay whatever you still owe, because ignorance of how zakah is to be paid does not mean that the obligation is waived. This is a debt that you owe and must pay.  See the answer to question no. 69798  And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

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https://islamqa.info/en/answers/72315/he-is-asking-about-paying-zakah-on-the-profits-of-a-company-only

Are printing materials subject to zakah?

Question There is a man who owns a printing press. Is zakah due on the materials and equipment in the printing press and on what he produces, or is zakah due only on the products?.

Praise be to Allah.Firstly:  In the answer to question no. 74987 we have stated that manufacturing equipment, materials and tools which are intended for use and not for sale are not subject to zakah. Rather zakah is due on the profits that result from using these tools and equipment, if it reaches the nisaab and one full hijri year has passed.  Based on that, these materials in the printing press are not subject to zakah.  Shaykh Ibn Baaz (may Allah have mercy on him) was asked a similar question and he replied:  zakah must be paid by the owners of printing presses and factories etc on the things that are prepared for sale; as for the things that are prepared for use, no zakah is due on them. The same applies to cars, furniture and vessels that are prepared for use; no zakah is due on them, because of the report narrated by Abu Dawood (may Allah have mercy on him) with a hasan isnaad from Samurah ibn Jundub (may Allah have mercy on him) who said: The Messenger of Allah (peace and blessings of Allah be upon him) used to command us to pay zakah on that which we had prepared for sale. End quote. Majmoo’ Fatawa Ibn Baaz, 14/186-187  Shaykh Ibn ‘Uthaymeen was asked about a man who had a laundry, and some people said to him: You have to pay zakah on the equipment that you have. Is this correct?  He replied: zakah is to be paid on trade goods, which are things that a person buys and sells, and whenever he thinks he can earn something he sells it and whenever he thinks he will not earn anything he does not sell it. Laundry materials are not regarded as trade goods, because the owner of the laundry wants to keep them with him, so they come under the same heading as what a man keeps in his house such as furniture, vessels and so on. So zakah is not due on them. Whoever told him that zakah is due on them is mistaken.  Majmoo’ Fatawa Ibn ‘Uthaymeen, 18/207  Secondly:  zakah is due on the profits of this printing press if they reach the nisaab and one full hijri year passes; one quarter of one tenth must be paid, i.e., 2.5 %.  Thirdly:  There are some of the goods owned by the printing press that are regarded as trade goods; this includes everything that the printing press buys with the aim of re-selling it after making some changes to it, such as paper, ink, materials used for binding books, and books owned by the printing press which they print in order to sell, etc.  All of these things are regarded as trade goods, so their value should be calculated at the end of every year, and zakah paid at a rate of 2.5 per cent.  See Majallat al-Majma’ al-Fiqhi, 4/1/735, article by Dr. Wahbah al-Zuhayli.

Zakah urood al tijaarah zakah on trade goods

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https://islamqa.info/en/answers/69916/are-printing-materials-subject-to-zakah

Is the value of trade goods based on the selling price or the purchase price?

Question When working out the zakah on trade goods, is it based on the purchase price or the selling price?.

Praise be to Allah.The value of trade goods is worked out at the end of the year, based on the price for which the owner would sell them.  This is what is fair, for the value to be based on the selling price, which may be lower or higher than the purchase price, because at the end of the year, a person pays zakah on the wealth that he has.  Ibn Qudaamah said in al-Mughni (4/249)  Whoever owns trade goods and one year has passed, and they reach the nisaab, should work out their value at the end of the year. If they reach the nisaab, he should pay zakah, which is one-quarter of one-tenth of their value. End quote.  It says in al-Mawsoo’ah al-Fiqhiyyah (13/171):  The trader should not work out the value of his trade goods on the basis of the price of one who is forced to sell his products. Rather he should base it on the price which he would get if he sold it without being under great pressure. End quote.  So the values should be based on the selling price at the end of the year.  Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) said:  In the case of land which is bought in order to be sold, the owners usually wait for the price to increase. These are trade goods, and the value of trade goods should be worked out when one year has passed, then one-quarter of one-tenth should be paid.   It makes no difference whether the value of the land is the same as the price you bought it for or not. If we assume that a man bought some land for one hundred thousand, and when one year has passed it is worth two hundred thousand, then he must pay zakah on two hundred thousand. If the opposite happened, and he bought it for one hundred thousand and after one year has passed it is worth fifty thousand, then he only has to pay zakah on fifty thousand, because what matters is the value at the time when zakah becomes due.  Majmoo’ Fatawa Ibn Uthaymeen, 18/205; see also 18/240  The Standing Committee was asked: In the case of land that has been bought for trade, how should the zakah be worked out? Is it based on the purchase price or on the market value at the time when one year has passed and the zakah is due?  They replied:  Land which has been bought to sell comes under the heading of trade goods, and the general principle in Islamic sharee’ah is that the value of trade goods should be worked out after one year has passed, according to their market value, regardless of the purchase price, and regardless of whether the market price at the time when zakah becomes due is more or less. The zakah should be paid on their value, and the rate of zakah is one-quarter of one-tenth. In the case of land that is worth one thousand riyals, for example, the zakah is twenty-five riyals, and so on."(Fatawa al-Lajnah al-Daa’imah, 9/324)  It also says in Fatawa al-Lajnah al-Daa’imah (9/319):  The shar’i way is to evaluate the trade goods that one has at the end of the year according to their market value at the time when zakah becomes due, regardless of the purchase price. End quote.  Based on this, if the trader sells wholesale or retail, the value of the goods that he has should be based on the price for which he sells them.  Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) was asked: It is known that what matters is the value of the goods at the time when zakah becomes due. But even at the time when zakah becomes due, the price varies between wholesale and retail. Should we look at the wholesale price or the retail price?  He replied:  If the trader deals in wholesale, he should look at the wholesale price, and if he deals in retail, he should look at the retail price."(Majmoo’ Fatawa Ibn ‘Uthaymeen, 18/233) See also question no. 26236.

Zakah urood al tijaarah zakah on trade goods

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https://islamqa.info/en/answers/65515/is-the-value-of-trade-goods-based-on-the-selling-price-or-the-purchase-price

He bought some land in order to sell it after a while – how should he pay zakaah on it?

Question How should zakaah be paid on land which was bought with the aim of leaving it for a while then selling it?.

Praise be to Allah. If a person has bought land with the intention of selling it after a while, one of the following two scenarios must apply:  1 – He aims to save the money so that he will not spend it on anything else, but he does not intend to trade or make a profit. In this case there is no zakaah on the land.  See question no. 34802  2 – He does intend to trade and make a profit, in which case this land comes under the heading of trade goods, so zakaah must be paid on it.  The value of trade goods should be worked out at the end of one year on the basis of their current value, not the price for which they were bought, and the zakaah must be paid on them. The rate of zakaah that must be paid is one-quarter of one-tenth, i.e., 2.5%.  For example: if you bought land for one hundred thousand riyals, and when zakaah becomes due on it its value is now one hundred and fifty thousand riyals, then when one year had passed you must pay the zakaah of one hundred and fifty thousand riyals. The converse also applies. If you bought it for one hundred thousand riyals and when one year has passed its value is now only fifty thousand riyals, then you only have to pay zakaah on fifty thousand riyals.  See Fataawa al-Lajnah al-Daa’imah, 9/334; Fataawa wa Rasaa’il al-Shaykh Ibn ‘Uthaymeen, 18/205, 236  Note:  It should be noted that the year for reckoning zakaah on trade goods does not begin from the time one bought the land or other product, rather it begins from the time when the wealth with which you bought those goods reached the nisaab (minimum threshold).  Based on this, the year for this land is the year for the money with which you bought it.  See question no. 32715.

Zakah urood al tijaarah zakah on trade goods

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https://islamqa.info/en/answers/38886/he-bought-some-land-in-order-to-sell-it-after-a-while-how-should-he-pay-zakaah-on-it

Should the equipment in a store be included when calculating zakah?

Question I want to ask about zakah, I have a store selling stationery and offering services for students. I have read about zakah on trade goods when one year has passed, but there is a question about student services – should photocopying equipment be included when calculating zakah, as it is very costly?.

Praise be to Allah.Firstly:  You have to pay zakah on all the wealth that you have in the form of cash or products offered for sale in the stationery store after one full (Hijri) year has passed, if their value meets the minimum threshold for zakah (nisab).  Fatawa al-Lajnah al-Daa’imah, 9/313.  Secondly:  The nisab is twenty mithqaal of gold, i.e., eighty-five grams; or one hundred and forty mithqaal of silver (i.e., 595 grams). The equivalent in Saudi dirhams of silver is fifty-six riyals.”  Fatawa al-‘Uthaymeen, 18/93.  If the value of the goods offered for sale, plus the cash money that you have is equal to one of these two nisabs, gold or silver, then you have to pay zakah.  Fatawa al-Lajnah al-Daa’imah, 9/257.  Thirdly:  How zakah is to be calculated.  If one year has passed for the threshold, you should calculate how much money you have, and add to that the value of the goods offered for sale in the stationery store, then pay one-quarter of one-tenth (i.e., 2.5%) of the total, which you should give to those who are entitled to it of the groups mentioned in the verse (interpretation of the meaning):  “As-Sadaqaat (here it means zakah) are only for the Fuqaraa’ (poor), and Al-Masaakeen (the poor) and those employed to collect (the funds); and to attract the hearts of those who have been inclined (towards Islam); and to free the captives; and for those in debt; and for Allah’s Cause (i.e. for Mujaahidoon — those fighting in a holy battle), and for the wayfarer (a traveller who is cut off from everything); a duty imposed by Allah. And Allah is All-Knower, All-Wise” [Al-Tawbah 9:60] The value of the goods on sale in the stationery store should be based on the price for which they are sold, not the price for which they were bought. See question no. 26236.  Fourthly:  With regard to the photographic equipment, there is no zakah on it, unless you have prepared it for sale.  Shaykh Ibn Baz (may Allah have mercy on him) said:  There is no zakah on items that are for use, whether they are tools or other things. The basic principle is that whatever is prepared for sale is that on which zakah is due. Tools or equipment used in the store are not subject to zakah.  Fatawa Ibn Baz, 14/184.  And Allah knows best.

Zakah urood al tijaarah zakah on trade goods

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https://islamqa.info/en/answers/42072/should-the-equipment-in-a-store-be-included-when-calculating-zakah

Is zakaah due on business premises?

Question In 1996 I bought a shop for my brother to work in, but the shop has remained closed until now; my brother has not worked in it and I have not benefited from it. It did not enter my mind that zakaah may be due on it until recently. The price of the shop when I bought it was 400,000, then the price dropped to 300,000 in the year 2000. Now the price is between 700,000 and 800,000. In the coming year, in sha Allaah, I will try to open the shop so that someone can work in it and benefit from it.  I hope that you can advise us as to whether zakaah is due on it or not. What can I do if I do not have enough money to pay zakaah?.

Praise be to Allah.The Muslim does not have to pay zakaah on his car, house or shop, even if the value of these things is great. Rather zakaah is due on things that are bought and sold for the purpose of trade and profit, which are called “trade goods”. If a person has any property or real estate – land, houses or shops – which he has acquired for the purpose of trade, buying and selling, then he should work out their value at the time when zakaah becomes due and pay one-quarter of one-tenth. But if a person has acquired that property to live in, or to farm it, or to rent it out or to buy and sell in it, then no zakaah is due on it.  The scholars of the Standing Committee said:  Wealth that people own is of various types. With regard to money, zakaah is due on it if it reaches the minimum threshold (nisaab) and one hijri year has passed. In the case of agricultural land, zakaah is due on the grains and crops on the day of the harvest, not on the land itself. In the case of land or buildings that are rented out, zakaah is due on the rent when one year has passed, not on the land or building itself. If the land, building or other goods are for trade, then zakaah is due on them when one year has passed, and you should pay zakaah on the profit when one year has passed for the capital, if the capital has reached the nisaab. End quote.  Fataawa al-Lajnah al-Daa’imah, 9/331  Based on this, you do not have to pay zakaah on this shop.  And Allaah knows best.

Zakah urood al tijaarah zakah on trade goods

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https://islamqa.info/en/answers/78607/is-zakaah-due-on-business-premises

His property is for rent – does he have to pay zakaah on it?

Question If a person has property that he has prepared to rent out, does he have to pay zakaah on this property?.

Praise be to Allah.Shaykh Muhammad ibn ‘Uthaymeen (may Allaah have mercy on him) said:  There is no zakaah on this property, because the Prophet (peace and blessings of Allaah be upon him) said: “There is no zakaah due on the Muslim’s slave or horse.” Rather zakaah is due on the rents, if one hijri year passes from the time of the contract. For example:  A man rents out this house for ten thousand, and receives ten thousand after the year is over. He has to pay zakaah on this money, because one year has passed since the contract was signed. Another man rented out his house for ten thousand, five thousand of which is paid at the time of signing the contract, which he spent within two months, and five thousand was to be paid halfway through the year, which he took and spent within two months. When the year ended he did not have anything left of the rent, so no zakaah was due on it, because no full year passed with the money in his possession. In order for zakaah to be obligatory, a full year should pass with it in the person’s possession.

Zakah urood al tijaarah zakah on trade goods

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https://islamqa.info/en/answers/13361/his-property-is-for-rent-does-he-have-to-pay-zakaah-on-it

There is no zakah on an’aam animals unless they graze on pasture with no expenditure on their food

Question Is zakah due on sheep that do not graze and money is spent monthly on buying food for them? Is there any zakah on sheep that graze on pasture and herbage and nothing is spent on food for them? I hope that you can explain.

Praise be to Allah.The majority of scholars, including the three imams Abu Haneefah, al-Shaafa’i and Ahmad, are of the view that zakah is not due on an’aam animals (camels, cattle and sheep) unless they graze on pasture and their owner does not feed them. If they are fed [with food that is bought for them] then there is no zakah on them.  They quoted several texts as evidence, including the following:  1 – The report narrated by al-Bukhaari (1454) from Anas, that Abu Bakr (may Allah be pleased with him) wrote him the following letter when he sent him to Bahrain: “In the name of Allah, the Most Gracious, the Most Merciful. This is the obligation of zakah which the Messenger of Allah (peace and blessings of Allah be upon him) enjoined on the Muslims and which Allah enjoined upon His Messenger. Whoever among the Muslims is asked to pay it in the proper manner, let him give it and whoever is asked for more than that, let him not give more … With regard to the zakah on sheep in the pasture, if they number between forty and one hundred and twenty, one sheep (is due as zakah)…”  The fact that the word ghanam (sheep) is further defined by their being described as being in the pasture indicates that there is no zakah on those that are not in the pasture.  2 – The report narrated by al-Nasaa’i (2444) from Bahz ibn Hakeem from his father, from his grandfather who said: I heard the Prophet (peace and blessings of Allah be upon him) say: “For grazing camels, for every forty an ibnat laboon (a two-year old she-camel)…” Classed as hasan by al-Albaani in Irwa’ al-Ghaleel, 791.  The fact that the word ibl (camels) is further defined by describing them as grazing indicates that there is no zakah on other kinds.  Cattle come under the same ruling as camels and sheep.  See al-Sharh al-Mumti’, 5/33  Al-Nawawi said in al-Majmoo’:  The fact that it is limited to those that are grazing is regarded as evidence in our view. Grazing means those that graze in the pasture and are not fed.  Ibn Qudaamah said in al-Mughni:  The fact that grazing animals are specifically mentioned excludes those that are fed, on which no zakah is due according to the majority of scholars.  Maalik was of the view that zakah is due on all an’aam animals whether they are grazing or non-grazing. He quoted as evidence for that the fact that in some ahaadeeth the word ibl (camels) in used in a general sense and is not defined as those that are grazing, as in the letter of Abu Bakr to Anas (may Allah be pleased with them both) in which it says: “With regard to twenty-four camels or less, for every five one sheep (is to be given as zakah).”   The majority of scholars responded to this deduction by stating that this hadith is general in meaning, and that the other ahaadeeth define (the animals) as those that graze. The basic principle here is that the general should be interpreted in light of the specific.  They supported this by saying:  With regard to the zakah on an’aam animals, it is connected to the idea of growth and multiplication. This is obvious with regard to grazing animals, because there is no cost involved in looking after them. With regard to animals that are fed, there is a cost involved in looking after them, and that cost may be equal to any growth (in their numbers or weight). Thus the wisdom and mercy of Allah dictated that zakah should be waived unless the (grazing) animals are prepared for the purpose of trade, such as when one buys animals then looks after them and feeds them in order to fatten them for sale. In that case they come under the heading of trade goods and thus are subject to zakah.  al-Mughni, 4/12; al-Mawsoo’ah al-Fiqhiyyah, 23/250.  For more information on how to calculate the zakah on trade goods, see question no. 10823.  Shaykh al-Islam Ibn Taymiyah said in Majmoo’ al-Fatawa (32/32):  The words in this hadith, “for grazing sheep” represent an area concerning which there is some scholarly difference of opinion. The view of Maalik is that working camels and oxen, and rams that are fed, are subject to zakah. Abu ‘Umar said: This is also the view of al-Layth, but I do not know of anyone who said it apart from them. With regard to al-Shaafa’i, Ahmad and Abu Haneefah, and also al-Thawri, al-Awzaa’i and others, in their view no zakah is due on these animals. This was narrated from a number of the Sahaabah: ‘Ali, Jabir, and Mu’aadh ibn Jabal. ‘Umar ibn ‘Abd al-‘Azeez also wrote a letter to this effect, and it was narrated in the hadith of Bahz ibn Hakeem from his father, from his grandfather, from the Prophet (peace and blessings of Allah be upon him), that he said: “For all grazing livestock, for every forty a two-year-old she camel (bint laboon).” So it was limited to grazing livestock, and other general reports should be interpreted in the light of specific reports, when both are speaking of the same type of animals, and there is no dispute among the scholars concerning this matter. The same may be noted concerning the hadith of Abu Bakr about grazing sheep.  It says in Fatawa al-Lajnah al-Daa’imah, 9/205:  One of the conditions of zakah being due on camels, cattle and sheep is that they should be grazing.  And Allah knows best.

Zakat baheemah al anaam zakah on anaam animals

https://islamqa.info/en/categories/topics/107/zakat-baheemah-al-anaam-zakah-on-anaam-animals

https://islamqa.info/en/answers/40156/there-is-no-zakah-on-anaam-animals-unless-they-graze-on-pasture-with-no-expenditure-on-their-food

No zakaah is due if one ceased to own the nisaab (minimum threshold) before the year was complete

Question A person bought 64 head of sheep from his mother and ownership passed to him, and there was only one month left before the year was complete for zakaah to be paid on them when they were in his mother's possession. He is asking about zakaah: should he pay the zakaah on them? Or does zakaah have to be paid on them as he only bought them a few days ago, and there was only one month left for the year to be completed when they were in his mother's possession?.

Praise be to Allah.Zakaah is due on sheep if they reach the nisaab or minimum threshold -- which is forty sheep -- and one full (Hijri) year has passed since they came into your possession, because of the hadeeth of Ibn Maajah (1792) from ‘Aaishah (may Allaah be pleased with her) who said: I heard the Messenger of Allaah (blessings and peace of Allaah be upon him) say: “There is no zakaah on wealth until one year has passed.” Classed as saheeh by al-Albaani in Irwa’ al-Ghaleel, no. 787.  The passage of one year is a condition of zakaah being obligatory on gold, silver, cash and an’aam animals (i.e., camels, cattle, sheep and goats).  If you ceased to own it before the year was completed, either because the property was destroyed or sold or given away and the like, then zakaah is not obligatory on it.  Based on that, zakaah is not due from your mother, because she ceased to own the sheep before one year was completed. And zakaah is not due from you for these sheep that you bought until one full year has passed from the time that you took possession of them.  And Allaah knows best.

Zakat baheemah al anaam zakah on anaam animals

https://islamqa.info/en/categories/topics/107/zakat-baheemah-al-anaam-zakah-on-anaam-animals

https://islamqa.info/en/answers/106877/no-zakaah-is-due-if-one-ceased-to-own-the-nisaab-minimum-threshold-before-the-year-was-complete

There is no zakah on birds

Question We have birds at home which we feed and raise. Is zakah due on them?.

Praise be to Allah.Zakah is due on an’aam animals (camels, cattle and sheep), if they reach the nisaab (minimum threshold) and graze freely, eating plants that grow in the ground, and their owner does not spend money on feed for them.  See the answer to question no. 40156.  With regard to other animals, no Zakah is due on them, unless they are prepared for sale (trading).  If these birds are being raised for sale, to make money from them, then Zakah is due on their value at the end of the year. If they are being raised for some purpose other than sale or trade, then no Zakah is due on them.  Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) was asked: Some people raise birds – is any Zakah due on them?   He replied: If those who raise birds do so for the purpose of trade, then Zakah is due from them, because they are trade goods, i.e., the person buys and sells them and earns money thereby.  But if they want to raise them to eat them or sell those that are surplus to their needs, then no Zakah is due on them, because Zakah is only due on three kinds of animals: camels, cattle and sheep, subject to the well known conditions. End quote.  Majmoo’ Fatawa Ibn ‘Uthaymeen (18/54).  And Allah knows best.

Zakat baheemah al anaam zakah on anaam animals

https://islamqa.info/en/categories/topics/107/zakat-baheemah-al-anaam-zakah-on-anaam-animals

https://islamqa.info/en/answers/105320/there-is-no-zakah-on-birds

There is no zakah on horses and donkeys if they are not for trade

Question Is any zakah due on horses and donkeys?.

Praise be to Allah.The animals on which zakah is due are the an’aam animals, i.e.:  1-Camels 2-Cattle 3-Sheep, which includes goats That applies if they reach the nisab and are pastured, i.e., if they graze and eat of the plants that grow on the land, and their owner does not spend anything on buying feed for them. See the answer to question no. 93387 and 40156.  As for other animals, no zakah is due on them unless they are prepared for sale.  Al-Nawawi said in al-Majmoo’ (5/311): The Muslims are unanimously agreed that zakah is due on camels, cattle and sheep. As for horses, mules, donkeys, etc., no zakah is due on them. This applies if they are not for trade; if they are for trade then they are subject to zakah, because of the report narrated by Abu Hurayrah (may Allah be pleased with him), that the Prophet (S) said: “The Muslim is not obliged to pay zakah on his slave or his horse.” End quote.  The scholars of the Standing Committee for Issuing Fatwas were asked: Some people spend the wealth that Allah has spent them on keeping valuable purebred horses the price of which may be thousands of dinars in order to enter races with the aim of winning the prizes offered. My question is: Are these horses and their offspring subject to zakah, and what is the nisab and the rate of zakah that is due?   They replied:  If the matter is as described, and they buy them to keep them, not to sell them, then no zakah is due on them, because the Prophet (peace and blessings of Allah be upon him) said: “A man does not have to pay zakah on his horse or his slave.” Saheeh – agreed upon."(Fatawa al-Lajnah al-Daa’imah  9/216).  And Allah knows best.

Zakat baheemah al anaam zakah on anaam animals

https://islamqa.info/en/categories/topics/107/zakat-baheemah-al-anaam-zakah-on-anaam-animals

https://islamqa.info/en/answers/99061/there-is-no-zakah-on-horses-and-donkeys-if-they-are-not-for-trade

Animals on which zakah is due

Question What are the animals on which zakah is due?.

Praise be to Allah.The animals on which zakah is due are the an’aam animals, which are:  1-Camels 2-Cattle, including buffalo 3-Sheep, which includes goats This applies if their number reaches the nisab and they are put out to pasture, i.e. they graze and feed from plants on the land, and their owner does not purchase feed for them. See the answer to question no. 40156.  Other kinds of animals are not subject to zakah unless they are for dealing and trading, in which case zakah must be paid as for trade goods, such as a person who deals in ostriches, ducks, chickens, horses and so on.  If they are an’aam animals that are given feed, but their owner trades in them, then he should pay zakah as for trade goods, so he should work out their value when one year has passed and pay one-quarter of one-tenth of their value as zakah.  It says in al-Mawsoo’ah al-Fiqhiyyah (23/250): The fuqaha’ are unanimously agreed that camels, cattle and sheep are the kinds of animals on which zakah must be paid, and they quoted many ahaadeeth as evidence for that. There is a difference of opinion with regard to horses. As for mules, donkeys and other kinds of animals, no zakah is due on them unless they are for trade. End quote.  And Allah knows best.

Zakat baheemah al anaam zakah on anaam animals

https://islamqa.info/en/categories/topics/107/zakat-baheemah-al-anaam-zakah-on-anaam-animals

https://islamqa.info/en/answers/93387/animals-on-which-zakah-is-due

There is no zakaah on an’aam animals unless they grazed for the whole year or most of it

Question I have camels and sheep which graze for part of the year and are fed by me for the other part. Is zakah due on them or not?.

Praise be to Allah.We have already stated in the answer to question no. 40156 that zakah is not due on an’aam animals [i.e., camels, cattle, sheep or goats] unless they graze for all or most of the year. But if they are fed for half of the year or more, then no zakah is due on them.   Ibn Qudaamah said in al-Mughni:  The view of our imam (i.e., Imam Ahmad) and the view of Abu Haneefah is that if they graze for most of the year, then zakah is due on them. Al-Shaafa’i said: If they do not graze for the entire year then no zakah is due on them, because grazing is a condition of zakah being due, so it should be year-round. We have the general meaning of the texts which indicate that zakah is due on livestock. The definition of grazing is not cancelled out if a little fodder is given to the animals, and does not mean that they are not included in this report, because giving a little fodder sometimes cannot avoided, and feeding year-round will waive the zakah altogether; because owners of grazing animals cannot avoid giving their livestock fodder sometimes, such as on cold days and when it snows.  From al-Mawsoo’ah al-Fiqhiyyah, 23/250.  Shaykh al-Islam Ibn Taymiyah was asked about a man who had camels and rented pasture for them during the grazing season – is zakah due on it?  He replied:   If they graze for most of the year, and he rents pasture for them for three or four months, he has to pay zakah on them. This is the more clear of the two scholarly opinions. Majmoo’ al-Fatawa, 25/48.  Shaykh Ibn Baaz (may Allah have mercy on him) was asked:  A man has one hundred camels but for most of the year he feeds them. Is zakah due on them?  He replied:  If the flock of camels, cattle or sheep does not graze for the whole year or most of the year, then no zakah is due on them, because the Prophet (peace and blessings of Allah be upon him) stipulated that for zakah to be due, the animals should be grazing. If their owner feeds them for most of the year or half of the year, no zakah is due on them, unless they are for trading, in which case zakah is due on them as trade goods, as in the case of land, cars, etc that are prepared for sale, if their value reaches the nisaab of gold or silver.  Shaykh Ibn ‘Uthaymeen said in Fatawa al-zakah (49):  Flocks which are fed for half the year are not subject to zakah, because the zakah on livestock is only due on animals that graze on plants that Allah causes to grow on the ground for the whole year or for most of the year. But if they are fed for part of the year or half the year, then no zakah is due on them. But if they are prepared for sale, then they come under the ruling on zakah on trade goods. If that is the case, then they are subject to zakah when their value is estimated each year, then one quarter of one-tenth of their value should be paid, i.e., 2.5% of their value.  It says in al-Sharh al-Mumti’ (6/32):  If a person has camels that graze for five months and are fed for seven months, then no zakah is due on them. If they graze for six months and are fed for six months, then no zakah is due on them. If they graze year-round, then zakah is due on them. If they graze for seven months and are fed for five months, then zakah is due on them.  It says in Fatawa al-Lajnah al-Daa’imah (9/214):  zakah is due on grazing sheep, if they graze for the whole year or most of it.

Zakat baheemah al anaam zakah on anaam animals

https://islamqa.info/en/categories/topics/107/zakat-baheemah-al-anaam-zakah-on-anaam-animals

https://islamqa.info/en/answers/49041/there-is-no-zakaah-on-anaam-animals-unless-they-grazed-for-the-whole-year-or-most-of-it