Question

As salamu alaykum.
May i know some facts regarding zakath,
1. What assets is it taken out on?
2. I think you have to own the asset for 2 years and the percentage is 2.5%, am I correct?
3. When distributing, first comes the family right?
Any other things that have to be known?

In a scenario where you have money on the books ie you bought something from someone on credit and sold it to another person on credit. In this case your profit is already in the books but you only actually get the cash once the person who you sold the goods to pays you back. What is the ruling of zakath on transactions like this?

Answer

Wa Alaykum Al-Salam

1. Zakah is paid on all assets, after deduction of liabilities and necessities of livelihood. Liabilities such as: money owed or immediate debts etc. Necessities of livelihood are those belongings that are essential for the ease of his life such as: his home for living, transport for travelling, clothes, appliances, crockery, cutlery, phone and furniture etc. For a professional, his apparatus, instruments or machinery are also regarded essentials of livelihood.
2. In Zakah, the lunar year is considered rather than the solar. The lunar year is about 355 days. If the person has accumulated wealth, which is above the nisaab threshold and has held it for a whole lunar year, then zakah becomes due upon the end of this first year. The amount due is 2.5 percent of the assets upon which he has to pay zakah.
3. From those who are eligible to take zakah, it is more rewarding and best to give to one’s own brothers and sisters first, if they are eligible; then their children; then to the paternal uncles and aunts; then their children; then the maternal uncles and aunts; then their children; then to the relatives; then to the neighbours; then to the work colleagues; then to the other people of your village, town or city. It is not permissible to give zakah to one’s own spouse, usool and furoo. Usool are your origin: meaning your parents, grandparents, great grandparents and so on. Furoo are the opposite: meaning your children, grand children, great grand children and so on.

In regards to the scenario mentioned in the question, Zakah is necessary on the money he has not yet received, due to the fact that ownership has been established. However, Zakah will only be due for discharge from it when he receives it and it is in his possession. When it is in his possession, he will have to discharge Zakah for the past, as well as from the time he became the owner of it. Therefore, it is best for him to include it now, rather than worry about it when he receives it.

And Allah knows best.

Zahid Hussain Al-Qadiri
(Beggar at the doorstep of Scholars)
21st Sha’baan 1435