Q. 1a) Is 'Zakah'
payable on a Bungalow/House irrespective of how big it may be, which is
occupied by us? If 'Zakah' is payable, should it be on cost or on the
Market Value?
b) If any loan is taken against the Bungalow or House, should Loan
amount be deducted before calculating 'Zakah' Amount?
A. a) Zakah is not payable on the Bungalow/House which you own
and utilize for residential purposes. However, if the Bungalow/House is
purchased or built with the intention of resale, then Zakah will be payable
on it's market value.
b) A loan taken against the Bungalow/House can be deducted from
the Zakatable amount.
Q. 2. Is 'Zakah'
payable on Furnitures, Fixtures, such as Electric Equipment, Airconditioners,
Carpets, Crockery, etc.? If payable, should it be on the cost or on the
market Value?
A. Zakah is not payable on furniture, electric equipment, airconditioners,
carpets, crockery, and their items that are for household utilization.
Q. 3. Is 'Zakah'
payable on Bungalows/Houses or Flats which are given on rent or which
remain vacant. If payable, should it be on the original cost or on the
market value?
A. Zakah will be paid only on the rent accrued from the properties
owned. Zakah will not be paid for vacant property, unless if procured
for resale purposes; more specifically, for the sale of such assets.
Q. 4. Is 'Zakah'
payable on the cost or the market value of an investment made in open
land (Residential plot)?
A. If the residential plot is purchased for the purpose of resale
then Zakah will be liable at the market value, but if the plot is acquired
for purposes other then being resold then Zakah will not be payable.
Q. 5. JEWELLERY
a) Is 'Zakah' payable on jewellery and Diamonds? If so, on the
purchase value or on the market value?
b) Is 'Zakah' payable on Gold/Silver jewellery in use by wife,
daughter or kept as investment-If so, is zakah payable on the purchase
value? or the market value?
A. a) Zakah will be payable on gold and silver jewellery, if such
jewellery exceeds the minimum weights:
for Silver : 52.2 Tolas / 613,35 Grams. for Gold : 7.5 Tolas / 87,479
Grams.
Zakah will be paid as follows :
[Number of Tolas / Grams x cost of 1 Tola / Gram
(Silver / Gold)] multiplied by 2,1/2 % = Zakah amount
Zakah is not payable on diamonds, despite their value.
b) Zakah is not payable on jewellery of Gold / Silver even if it
is used by your wife or daughters (Hanafi view).
Such Zakah is calculated on the market value of the gold or silver used
in the jewellery.
Q. 6. Is Zakah
payable on :
a) Premium of Insurance Policies (personal). If payable, whether
on the total premium amount paid. Should it be paid yearly or can be paid
at maturity on total receipt inclusive of bonus etc.?
b) Investments made in bearer Instruments such as prize Bond, NDFC,
where no zakah deductions are made. Is Zakah payable on the face value
or on the accrued value ? Can Zakah be paid on maturity?
c) On investment in securities such as N.I.T. Units, Khas deposit
certificates (Registerd), in this case 'Zakah' is deducted on profits
and on the face value each year, and net amounts paid to investor. Are
we liable to pay any other amount as "Zakat"?
d) Investment made in Public limited Shares where 'Zakah' is deducted
on Dividend paid. 'Zakah' is not deducted if devidends are unpaid.
Are we liable to pay 'Zakah' each year if not paid by the company. Also
whether 'Zakah' payable on market value of Shares = (Difference Value
i.e. Market Value - Purchase Value)?
A. a) Most of the conventional insurance modes are impermissible
according to a Shariah. Anyone who has entered into such conventional
insurance modes, should refrain therefrom. However, he is entitled to
receive the amount of the actual premiums which he has paid into the company.
So if he receives the premiums back, he must pay Zakah on the amount which
he has received. If he has received it after a number of years, Zakah
will be payable for all the preceding years as well. Any bonus, intrest
or insured amount paid to him by the company will be impermissible. He
must refuse to accept such sums or distribute it to those entitled to
receive Zakah.
b) The "Prize bond" and other investment instruments
of the NDFC are in direct conflict to the injuctions of Islam. Any returns
accrued from such investments will resultantly be classified as impermissible.
Zakah will be paid on the faoce value of the bonds are certificates issued
by the NDFC (National Development Finance Corporation - Pakistan).
If Zakah is paid at maturity, then Zakah will have to be discharged for
the previous years as well.
Any Profit, prize or intrest received on these bonds or certificates would
be Haraam, hence not liable to Zakah. Yet the entire amount of this profit,
prize or intrest should be given as Sadaqah to anyone entitled to receive
Zakah.
c) The Zakah deducted on NIT Units (National Investment Trust -
Pakistan) each year, need not be re-given, provided that zakah is deducted
on both the face value and the profit.
As for the Khas deposit Certificate, profits given on them are impermissible
in Shariah. Profits accrued on them are of intrest and should therefore
not be accepted. Anyone receiving such sums should distribute them to
those entitled to receive Zakah.
d) Yes, if Zakah has not been deducted by the company, you are
under obligation to pay Zakah on the market value of the Shares. You can
deduct from the Zakatable value a proportion equivalent to that of the
fixed assets of the company (which are non-zakatable). If it is difficult
to ascertain that proportion, then it would be advisable pay Zakah on
the total market value of the shares.
Q. 7 a) We have
a firm which does import and export business. This firm also invested
in a building. The building stands in the name of a partnership Firm.
Part of the building is given to a factory on rental basis.
b) Is 'Zakah' payable on the building value? Also whether on the
original cost of the building, the Depreciated value or the current market
value?
A. a) As mentioned earlier, if the building is not acquired or
built with an intention to re-sell it, then no Zakah will be payable.
Only such part of the rent shall be liable to Zakah which stands in your
balance on the Zakah valuation date of each year and which has not been
spent.
b) However, Zakah shall be paid on it's market value if the building
is acquired or constructed with a clear intention of re-sale. In which
event, it becomes stock-in-trade.
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