Thursday 20 Jumada al-ula 1446 - 21 November 2024
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Zakaah must be paid on invested wealth and its profit when one full Hijri year has passed for the capital

Question

I have money that I gave to a friend of mine do business with it and give me the semi-annual profits; how should I give zakaah for it? I also have some money that I put into a savings account in an Islamic bank; how should I work out the zakaah for this money too? Should I give zakaah on the profits of the money mentioned, or on all the money?

Answer

Praise be to Allah.

If someone possesses the minimum threshold of wealth and one full Hijri year has passed since it was acquired (or reached the minimum threshold), he must give zakaah on it. The minimum threshold (nisaab) is the equivalent of 85 grams of gold or 595 grams of silver, and the rate that must be given is one quarter of one tenth (2.5%).

If this money is invested in a partnership with a friend, or in an Islamic bank, and profit results from that, then the zakaah on the profit is to be given at the same time as the zakaah on the capital. The year is counted from when the capital is acquired.

Ibn Qudaamah (may Allah have mercy on him) said regarding money that results from profit in trade: This must be added to what he already has of capital, and the year for the profit is the same as the year for the capital. We do not know of any difference of opinion concerning that."(Al-Mughni  2/258).

Based on that, if you have ten thousand, for example, and its zakaah becomes due in Ramadan, then when Ramadan comes, you must give zakaah on everything that you have of the capital and the profits acquired up to Ramadan. You can find out about this profit at the time of paying zakaah by asking the bank or your partner.

And Allah knows best.

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Source: Islam Q&A