Zakat – Case Study Example
May I request that a sample calculation be shared for illustration purposes for someone who earns salaried income, has stocks, investments in bonds, real estate plots for children’s education and marriage? Further, would like to clarify the application of zakat on balance sheet basis vs income statement basis. Ie 2.5% of annual cash and investment balance vs 10% on salary and then again 2.5% if the annual savings and idle cash+investments are above nisab?
From a balance sheet perspective 2.5% is paid till perpetuity so long the balance is above nisaab. Theoretically, this means 100,000 will get reduced by 2.5% each year if it stays idle in the account. Since all income will ultimately convert to savings could one use the balance sheet approach or is the hybrid of income and balance sheet approach the correct way?
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