Mu' meneen Brothers and Sisters,

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

One of our brothers/sisters has asked this question:

Assalam-o-alaikum.

I hope you and your team are absolutely fine by the grace of Almighty Allah.

I want to ask a question regarding Zakat because sometimes, I really feel confusion regarding deduction of Zakat on specific properties.

For example, a Billionaire has a mansion valuing $ 500 Millions and a commercial plaza costing $ 1 Billion; and especially he is earning a big revenue from his commercial plaza every year but he just has to pay Zakat on the revenue after a year but no Zakat is required on his residential mansion and commercial plaza; although their price increases every year.

But on the other hand, a poor widow who lives in a quarter on rental basis and does not has any permanent source of income and who has saved a small quantity of golden jewellery for her daughter's wedding; she will have to pay Zakat on the gold after every year.

I do not understand the procedure of Zakat, although Billionaires are exempt to pay Zakat on their commercial buildings, lands, factories/ plants, luxurious cars. Also wealthy ladies require no need to pay Zakat on their diamond or platinum jewellery but on the other hand, a woman having a small quantity of gold is required to pay Zakat.

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Answer:

Who is liable to pay zakah

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

If the total nett worth of any believer, regardless of whether it be a man, a woman, or even a child…..if their individual net worth is more than the prescribed ‘nisaab’ of 7.5 tolas of gold (app. 85 grams or app. Value US$1,000.00), then the person is liable to pay the obligatory annual zakat of 2.5% on their excess wealth which has been in their possession for a full calendar year.

The only things of value upon which one is not liable to pay are:

1. A house where one actually lives.
2. A vehicle which one actually uses.
3. The furniture and fixtures one uses in their daily lives.

Now to clarify your questions:

Ref-1: For example, a Billionaire has a mansion valuing $ 500 Millions and a commercial plaza costing $ 1 Billion; and especially he is earning a big revenue from his commercial plaza every year but he just has to pay Zakat on the revenue after a year but no Zakat is required on his residential mansion and commercial plaza; although their price increases every year.
Beloved Sister, one is not liable to pay ‘zakah’ on one’s annual income; but rather one is liable to pay ‘zakah’ on their net excess wealth which has been in their possession for a period of one full calendar year.

Thus, in your example, the ‘billionaire’ brother, except for the one house he actually lives in, the vehicle he uses, and the furniture and fixtures he uses on a daily basis…..he will be liable to pay ‘zakah’ on the current market value of every other asset and cash which have been in his possession for a period of one calendar year.

Thus the person will be liable to pay not only the ‘zakah’ on his $1-billion commercial plaza, but also on the cash savings he makes from the revenues after the payment of his annual expenses.

Thus except for the one house the person actually lives in, the vehicle one uses, and the furniture and fixture one uses….the person will be liable to pay ‘zakah’ annually on the current market value of all his other assets.

Ref-2: But on the other hand, a poor widow who lives in a quarter on rental basis and does not has any permanent source of income and who has saved a small quantity of golden jewellery for her daughter's wedding; she will have to pay Zakat on the gold after every year.

If the net worth of the person, the ‘widow’ in this case, is less than the prescribed ‘nisaab’, she obviously is exempt from paying any ‘zakah’.

But if the value of her jewelry is above the prescribed ‘nisaab’, she indeed will be liable to pay ‘zakah’ on her jewelry.

Ref-3: I do not understand the procedure of Zakat, although Billionaires are exempt to pay Zakat on their commercial buildings, lands, factories/ plants, luxurious cars. Also wealthy ladies require no need to pay Zakat on their diamond or platinum jewellery but on the other hand, a woman having a small quantity of gold is required to pay Zakat.

Beloved Sister in Islam, we reiterate again, that every single believer….man, woman, or child….whose net assets are worth more than the prescribed value of ‘nisaab’ is liable to pay their annual zakah dues, absolutely regardless of whether their net worth is just above the prescribed ‘nisaab’, or a million times above it!

Except for the one house where the ‘billionaire’ brother lives in himself, except for the one car the person uses, and except for the furniture and fixture the person uses in his daily life….the ‘billionaire’ brother will be liable to pay ‘zakah’ annually on the current market value of each of his commercial buildings, each of his other houses except the one he actually lives in, each of his cars except the one he actually uses himself, each of his factories/plants, and on all the cash and the wealth he has accumulated, etc……

Similarly, the ‘wealthy’ ladies will be liable to pay their annual ‘zakah’ on all their ‘diamond and platinum jewelry’ and all the other assets or cash which have been in their possession for a period of one calendar year.

We reiterate again, that regardless of whether one’s net excess assets happen to be just above the prescribed ‘nisaab’ or a million or even a billion times above it, the exact same law of determining ‘zakah’ will apply to both.

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

Your brother and well wisher in Islam,

Burhan