Q: I have shares with my company. I have held an x amount of shares for an entire year. This year the share value is unchanged from last year. Is the zakaah due still 2.5% on the value of all shares held by myself? Please advise.
A: Zakaat is Waajib on shares. However, it should be noted that Zakaat is not Waajib on the entire share. Rather Zakaat is only Waajib upon the Zakaatable assets of the company (i.e. the market value of the merchandise contained in the share of the company). As far as the non-Zakaatable assets of the company are concerned e.g. fixtures, fittings, transport vehicles, etc. which are not part of the merchandise of the company, the value of all these things will be evaluated in the share and will not be taken in account when discharging the zakaat.
If a person purchased shares in a company that hires out vehicles, e.g. a trucking company or leases out properties, estates, flats, etc., Zakaat will not be Waajib on this type of share. Instead, Zakaat will only be Waajib on the profits accrued from the share.
And Allah Ta'ala (الله تعالى) knows best.
Answered by:
Checked & Approved:
Mufti Ebrahim Salejee (Isipingo Beach)
Q: Why is zakaat not calculated on the zakaatable assets of these companies considering that these companies generally have other reserves, investments and cash on hand(which includes Petty's and cash/ deposits held in the bank etc)?
A: If the company has other zakaatable assets, then one will have to pay the zakaat of those zakaatable assets in proportion to one's share.
And Allah Ta'ala (الله تعالى) knows best.
Answered by:
Checked & Approved: