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Zakat On Shares —- Follow Up Question 3
“When you buy a a machine, you own it and it produces which you sell and make profits. You cannot convert your machine into money. This is not the case with investment. You don’t own a machine or thing.”
Ans: share certificate is documentary evidence of ownership of means of production. In case of bankruptcy, means of production are sold and after paying off liabilities, residual amount is divided amongst shareholders equally. This proves the ownership.
“You cannot convert your machine into money.”
Ans: shareholders can sell shares because they are willing to sell and stock market provides them opportunity to find buyers. In my above example, person A or B can sell part or whole of their investment and convert their investment into money. It is question of willingness not the question of possibility or impossibility.
“You don’t know if your money is used in buying a means of production or paid in utility bills, etc.”
Ans: when you buy a share, a contract is executed that makes shareholder owner of means of production immediately. That’s why you become eligible of residual amount of means of production (plant, factory, etc) in case of bankruptcy.
“You can take your money back anytime, according to the laws or SoPs. Therefore investment is not counted as means of production. Economics treat them differently.”
Ans: you can take your money back (sell your investment/shares) only if there are buyers in both scenarios (stock market and in my initial example). There is no difference in both cases.
Please comment?
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3 Replies
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Zakat On Shares —- Follow Up Question 3
updated 5 days, 1 hour ago
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Investment and production of means are two different things. they have different names and are treated differently in economics and finance. Making them the same through using analogies does not change the fact. For example, Riba and Trade are two different things, but some people insist based on some resemblance between them that they are the same. In both, something valuable is given and in return, some profit is earned. The Quran says:
ذَٰلِكَ بِأَنَّهُمْ قَالُوا إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا ۗ وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا
This is because they have said: “Trading too is after all like interest and how strange it is that God has permitted trading and forbidden interest.”
Investment and means of production stay different despite having some resemblances.
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There was no intent to disrespect whatsoever. It was just an open discussion but didn’t know closed discussion is the policy of this platform. Next time I will strictly ask for ghamdi sb’s opinion on the subject matter. But still want to apologise to learned Dr shehzad sb if my comment was disrespectful.
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