Category

Zakat
Question: What is the Zakat on a Shariah-compliant investment account based on Wakalah? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer: Zakat on a Shariah-compliant investment account depends on the nature of the investment. If such investments are made into Shariah-compliant money market products, the entire...
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Question: Is there Zakat on an investment in a start-up company? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer:  Zakat on a start-up depends on the underlying net Zakatable assets of the company. An investor will pay Zakat (2.5%) on the percentage of shareholding in net...
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Question: What is the Zakat liability on a fixed-term annuity? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer:  Zakat is not due on the total amount in a fixed annuity yet to be received. The Fiqh (jurisprudence of the answer): An annuity is a contract between you and...
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Question: How are raw materials, inventory and finished goods valued for Zakat? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer: 1. Raw material – for Zakat purposes, will consider its current value (usually difficult to determine, so may use cost price alternatively)  2. Work in progress...
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Question: What is the Zakat treatment for prepaid expenses? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer: The prepaid sum is no longer in one’s ownership and as such, it is not Zakatable. Prepaid expenses are future expenses that have been paid in advance. In other words, prepaid expenses are costs that have...
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Question: Is Zakat due on Sukuk al-Ijarah investments? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer: Ijarah Sukuk is based on an underlying Ijarah structure. Certificates are issued by a special purpose vehicle that entitles the holders to an ownership interest and a right to a return in proportion to...
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Question: Is there Zakat on Aviva Life Insurance Plan? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer: Zakat is not binding on the premiums paid to the policy.  More importantly, life insurance policies are prohibited.  Entering into such contracts without any legal requirement or necessity is...
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