How Should We Calculate Zakah on Assets?
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How Should We Calculate Zakah on Assets?

Questioner

Ali

Reply Date

Jul 18, 2017

Question

As-salamu `alaykum. How can we pay Zakah on assets? We have 7 trucks and 2 excavators. Presently, only two of the trucks and one excavator are working. Only three trucks have been paid for in full none of which has been working for the past year. The last truck was acquired only one month ago. Although we seem to have a lot of assets, we have little cash. How should we pay Zakah?

Mufti

Answer


How Should We Calculate Zakah on Assets?

Wa `alaykum as-Salamu wa Rahmatullahi wa Barakatuh.

In the Name of Allah, Most Gracious, Most Merciful.

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.


In this fatwa:

You should know that Zakah is due on the net worth of business. So, you pay Zakah on your assets at the end of the lunar year after deducing all the expenses.


In his response to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:

I believe that Zakah is on the net worth of business. Therefore, on the day of your Zakah you calculate your net worth and make some adjustments that include: pricing assets and inventory at market price on that day, removing accounting adjustment assets such as prepaid expenses, etc.

You then calculate Zakah at 2.5% on the adjusted balance of net worth. If you don’t have sufficient cash at that moment, you may delay all or a part of the amount due until you have sufficient liquidity without sin because this is a Shari`ah valid excuse.

But you must remember that any non-paid amount of due Zakah, for any reason, remains a debt on you until you pay it out.

Allah Almighty knows best.




About Prof. Dr. Monzer Kahf

Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies

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