On the question of Zakat, is Zakat due on new wealth created and held for a year or whatever a person possesses at the end of the fiscal year. Specifically my question is if I have a savings of $100 at the end of the fiscal year, zakat would be 2.5% or $2.50. The following year I have not added any new wealth so is the zakat due on $97.50? If I have added another $100 for that year then is Zakat due on $197.50 or just the added savings of $100 for that year.
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As-salaam
alaikum wa Rahmatullahi wa barakatuh
On the
question of Zakat, is Zakat due on new wealth created and held for a year or
whatever a person possesses at the end of the fiscal year. Specifically my
question is if I have a savings of $100 at the end of the fiscal year, zakat
would be 2.5% or $2.50. The following year I have not added any new wealth so
is the zakat due on $97.50? If I have added another $100 for that year then is
Zakat due on $197.50 or just the added savings of $100 for that year.
JazakAllahu
khair
Shaukat
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errors in the above statement. The forum does not change anything from
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Answer:
Zakah on earning or assets
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.
Every believer, regardless of whether man, woman, or
child, who has excess wealth (over the ‘nisaab which is appx US$1,000.00) 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 or profits,
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.
Thus the basic formula to calculate zakah is as follows:
All Assets (except the house one lives in, vehicle one
uses, etc.) minus all loans = Nett Excess Assets. It is on the market value of these Nett
Excess Assets upon which the annual zakah of 2.5% is due.
Your Question:
Specifically my question is if I have a savings of $100 at the end of the
fiscal year, zakat would be 2.5% or $2.50. The following year I have not added
any new wealth so is the zakat due on $97.50?
Firstly brother, zakah is only due on an individual whose
Total Assets are worth more than approximately US$1,000.00.
Thus assuming that one’s total Nett Excess Assets are
$100.00, then zakah for that year would indeed be 2.5% of $100.00 or $2.50.
If the following year one has not added any new wealth to
their savings of $97.50, then indeed the zakah for the following year would be
determined at 2.5% of $97.50 or $2.44.
Amr ibn Shuaib reported from Abdullah ibn
'Amr that the Messenger of Allah (saws), said: "One who becomes the
guardian of an orphan with property must trade on his behalf and not leave it
passive in order to avoid depletion of the property by zakah."
Related by al-Hafiz.
That is precisely why the Messenger of Allah (saws) guided
the believers to strive to invest their wealth, lest it is depleted by the
annual zakah due on it.
Your Question: If I
have added another $100 for that year then is Zakat due on $197.50 or just the
added savings of $100 for that year.
If one has initial savings of $97.50, and one adds $100.00
to it the following year, then the zakah for the following year would be
determined on their total savings of $197.50 at 2.5% or $4.94.
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