بسم الله الرحمن الرحيم
Answer to the Question
Regarding Zakat
To: Kartal Kara
(Translated)
Question:
Assalamu Alaikum, I have a question about zakat. First, I'll tell you the situation; I make profit on selling apartments. For example, I bought an apartment for 30,000 and sold it for 35,000, after one year I've made 20,000 profit. I had last year 100,000 and now I have 120,000; on which amount do I have to pay the zakat; 120,000 or 20,000?
Answer:
Wa Alaikum Assalam wa Rahmatullahi wa Barakatuh,
It is clear from the question that you are trading in the purchase and sale of apartments. Accordingly, Zakat here falls in the category of Zakat in trade, and trade deals are liable to Zakat without the existence of dispute in this matter among the Sahaba. Abu Dawood narrated from Samurah bin Jundub who said:
«أما بعد، فإن رسول الله صلى الله عليه وسلم كان يأمرنا أن نخـرج الصدقة من الذي نعد للبيع»
"Further, the Messenger of Allah (saw) commanded us to divert the charity from what we were sell"... The obligation of Zakat in trades was narrated from Omar, and his son, and Ibn Abbas, and the seven scholars, and Hasan, Jabber, Tawoos, al-Nakha'i, a-Thawri, al-Awzaa'i, a-Shafi'i, Ahmad, Abu Obeid, the seven scholars of fiqh, and Abu Hanifa, and others.
Zakat is due on trade deals if their value reaches the value of the quorum (Nisab) of gold, or the quorum (Nisab) of silver, when a whole year (al-Hawl) has passed on them.
If the merchant began his business, with money that is less than a quorum, and at the end of the year the money reached a quorum, than Zakat is not liable on him; because the quorum did not complete a whole year. He is obliged to pay Zakat on this quorum, after it completely passes a whole year (al-Hawl).
If the merchant began trade with money that exceed a quorum, say he had started his business with a thousand dinars, and at the end of the year his business has grown, and earned, and became worth three thousand dinars, then he has to pay Zakat for the three thousand dinars, and not for one thousand dinars, which he started out with; nor for the profit only, which he earned from them, but for the entire amount that has become his i.e. for the "3000". This is because the growth of the money that he began is included in this money and the time period of the resulting profit is the exact time period of the origin...
In other words, the issue is as follows:
1. When the value of the substance of trade reaches a quorum, it is twenty gold dinars i.e. 85 grams of gold, or two hundred silver dirhams i.e. 595 grams of silver... then this date is recorded and becomes the beginning of the year, "the Hijri year".
2. At the end of the year (al-Hawl) the value of the substance of the trade that he has is calculated: (the capital and the profit) and he gives out Zakat at a rate of (1 out of 40) or (2.5%).
3. Therefore, the answer to your question is as follows:
a. In the previous year you had 100,000 to trade with, and this is more than a quorum.
b. As a result of trading in the purchase and sale of apartments you earned during the year 20,000.
c. At the end of the year, "al-Hawl", you have 120,000.
d. Zakat is payable on all trade money, and not only on the profit. That is on the amount of the full trade, i.e. 120,000 at 2.5% i.e. 3000.
Your brother,
Ata Bin Khalil Abu Al-Rashtah
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