Calculating zakaat
Q: I have never had nisab for a full year. I normally get a bonus at the end of each year and then usually my income goes under the nisab during the year.
I do not have any other savings, investments, gold, silver, etc, but I do have nice furniture and expensive appliances. I also have a shariah loan outstanding for my car which I am still paying off.
Please advise if Zakaah is compulsory on me.
A: The principle in regard to zakaat is that on one's zakaat date, one will first add all one's zakaatable assets. After adding one's zakaatable assets, one will deduct all debts and liabilities. After deducting one's debts and liabilities, if one's remaining wealth reaches the nisaab amount or more, then one will pay 2.5% zakaat on the wealth. However, if one's remaining wealth is less than the nisaab amount or one does not possess any wealth as his debts and liabilities are more than what he owns, then zakaat will not be compulsory upon him.
One will not include one's home, car, furniture, appliances, etc. in one's zakaatable assets, as all these things are part of one's needs and necessities and zakaat is not compulsory upon these things.
It should be borne in mind that zakaat will only be compulsory upon one when he possesses zakaatable wealth and the wealth remains with him for an entire lunar year. In the case where the wealth decreased during the course of the year, but at the end of the lunar year, on one's zakaat date, one possessed the nisaab amount or more, zakaat will still be compulsory upon him. However, if during the year, all the wealth was spent and one did not possess any wealth, then despite one possessing the full amount of nisaab at the end of the lunar year, zakaat will not be compulsory. Instead, one year will be calculated from the date that he once again acquired the nisaab amount.
Note: Zakaatable wealth refers to cash in hand or in the bank, other foreign currencies, gold, silver, money that is owed to one through loans or sale of merchandise, shares in a company in proportion to the zakaatable assets which one owns in the company, etc.
And Allah Ta'ala (الله تعالى) knows best.
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