Please let me know if zakat is applicable on asset which is less than a year in possesion
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One of our brothers/sisters has asked this question:
Please let me know if zakat is applicable on asset which is less than a year in possesion , like gold etc. Do aslo let me know the zakat on gold is as per the average value of gold in a single year or as per the current price ?
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Zakah on gold
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Every believer, regardless of whether man, woman, or child, who has excess wealth (over the ‘nisaab) of their own, is liable to pay a 2.5% annual zakat of their nett excess wealth in Shariah.
Zakat is not determined from one’s earnings, but rather on one’s net excess wealth which is left over after paying all their expenses, and it has been in their possession for a period of one calendar year. There is no zakah liable on the house one lives in, or the furniture and fixture one uses in their house, or the car one drives, etc. But if one has property which one has bought as an investment, or spare vehicles other the one one drives, or jewelry, or any other excess asset…then zakah would be liable on these excess wealth and property.
Any asset, or wealth, or cash, or savings, which are left over after all of one’s expenses are paid, and that excess savings and wealth has been in their possession for one full calendar year is liable for payment of annual ‘zakat’ at 2.5% of its value.
Your Question: Please let me know if zakat is applicable on asset which is less than a year in possesion , like gold etc.
If the assets, be it property, or cash, or gold, etc., has not been in one’s possession for a period of one full calendar year, then zakah is not liable on those assets.
For example: say on the 1st of Jan 2005 one had $1,000.00 in cash, and six months later on the 1st of June 2005 one spent $500.00 of that cash on buying gold; thus at the end of the year the person had $500.00 in cash, and $500.00 in gold….because the value amount of $1,000.00 had been in his possession for a period of one full calendar year, the person would be liable to pay zakah on the $1,000.00 asset that he currently possesses.
Your Question: Do aslo let me know the zakat on gold is as per the average value of gold in a single year or as per the current price ?
There is absolutely no harm if one determines the liable zakah of one’s assets as per the average value over the calendar year or its current market value; but it would best and closest to piety to pay whichever value amount is higher.
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Your brother and well wisher in Islam,