Learn How To Read Arabic in 24 hours or less

Category: Financial Planning

Do I pay Zakat on savings only or on my checking account too?

Jul. 23 Financial Planning, Islamic Law 5 comments

zakat on savingsQuestion: Do I pay Zakat on my Savings only or on my checking account too?

Answer: Zakat is due on ANY surplus wealth. It must be more than the Nisab and is in your possession after one year passes. This includes: Savings accounts, checking accounts, actively invested shares or Mutual Funds. It also includes cash on hand, gold and silver (bullion or jewelry, etc). If you own a business it includes any inventory or property which is currently for sale, as well as business accounts (similar to those above).

Example: Ahmed owns his own business. He has a savings account with 10k and a checking account with 4k. He also owns a car posted on Craigslist for sale at 8k. His business account contains 4.5k, and he does not own any business inventory. He has possessed Nisab for one year, and he usually pays his Zakat on the 1st of Ramadan. He will pay 2.5% on 26,500 USD. He will pay 662.5.

Can I give Zakat to several people?

Jul. 22 Financial Planning, Islamic Law 7 comments

Question: Can I give Zakat to several people?

Answer: You can give all of your zakat to one person as long as he/she is eligible. You may also divide up your zakat and pay it to several people, as long as they are eligible under one of the eight categories.

For example: You have 300 USD to give as Zakat, you can give 300 to one person or divide it up amongst a group of people from one category, 5 debtors for example, each getting 60 USD each. You can also divide it up amongst eligible people of several categories, i.e. 1 poor person, 1 debtor, 1 refugee, 1 new muslim, etc.

And Allah knows best.

Do I have to pay Zakat on my car and home?

Jul. 22 Financial Planning, Islamic Law 8 comments

Question: Do I have to pay Zakat on my car and home?

Answer: You do not have to pay Zakat on any personal effects you own. By personal, I mean anything used primarily by yourself and your family for your general welfare and quality of life.

If you own a car or home for investment and/or resale then you pay 2.5% on the market price after having possessed it for one year. If you own a car or home and lease it to others, then you pay 2.5% on the revenue earned not the asset’study market price.

And Allah knows best.

Zakat Workshop, July 14th Synott Masjid 5-8pm

Jul. 04 Community, Financial Planning, Islamic Law 3 comments

This event was postponed due to an emergency.

Look for a new announcement this week, inshallah.

FACEBOOK EVENT LINK

Do I pay Zakat on my sports car?

Feb. 21 Financial Planning, Islamic Law, Quotes 8 comments

E-Nisab.com is a great site, and one that I frequently refer to. Today I noticed that they had posted this on their twitter account:

#zakat #fatwa: “Is zakat due on my luxury sports car?” http://t.co/N81ZA9QU
@e_nisab

The link provided refers back to Darul Fiqh’s site, where Maulana Faraz ibn Adam responds (referencing Rad al-Muhtar):

Any personal belonging for personal use such as a house, car, refrigerator and the like are not subject to zakāt. Even if it is surplus to requirements, zakāt is not due on such an item. Thus, there is no zakāt due on the sports car in reference.[i]

I would just add that one caveat to this general fatwa is that if and when a person using luxury items for the storage of value as a means to Zakat evasion, then these items become zakatable as well. During the time of Omar (May Allah be pleased with him) people purchased horses and slaves and claimed an exemption from Zakat due to texts negating any zakat liability on slaves and horses. Omar looked past the letter of the law, and held them liable for zakat.

What was his legalistic reasoning for doing so?

Twitter Weekly Updates for 2011-12-30

Dec. 30 Financial Planning, Quotes Comments Off
  • One of my shayks used to say: to learn humility, patience, and respect, walk behind the elderly… #
  • How can we "establish the deen" when we are missing a whole pillar? Earn, learn, then fulfill your obligation; Zakat #

Powered by Twitter Tools

Twitter Weekly Updates for 2011-12-30

Dec. 30 Financial Planning, Quotes Comments Off
  • One of my shayks used to say: to learn humility, patience, and respect, walk behind the elderly… #
  • How can we "establish the deen" when we are missing a whole pillar? Earn, learn, then fulfill your obligation; Zakat #

Powered by Twitter Tools