Zakat On Loss And PartnershipPosted by Adnan Ahmed on April 1, 2022 at 4:42 pm
I have a situation here .
I am salried person and pay zakat on my savings in cash, gold and other usual means.
Last year I invested my saving in (1) property(working as silent partner, with money only) with partners and got some profit
(2) futures market where I suffered heavy loss nearly half of my investment wiped out.
Should I calculate zakat seperetly on above two side businesses or commulatively ?
And what is ratio of zakat to calculate in my case ?
Keep in mind that I am standing in loss region if I see my investment commulatively.
Appreciate your kind inputs here.
April 1, 2022 at 7:40 pm
There are primarily two different types of zakat. Zakat on assets is calculated at the rate of 2.5% of the total current value of your assets. Zakat on production / earnings is calculated at the rate of 5% or 10% of the earned amount depending upon whether or not the earning was made using financial investment, labor, or both.
The easiest way for you is to enter appropriate numbers in our Zakat Calculator after reading the description for each box. When you reach the end, it will generate a statement showing you exactly what you owe after any applicable deductions, and what percentage was applied to which category. It’s also a great way to learn the sharia of zakat.
April 1, 2022 at 10:50 pm
Thanka faisal hatoon for your kind attention.
Zakat calculator is easy on property earnings what about future market situation where I have lost 50% of my capital over all … there were few positive trades wheee I earned a little while most trades ended in hige loss, so my net gain is negative here. Do I still need to pay zakat on few poaitive trades or this has to be calculated on net gain or net loss ?
Thanks once again for your valuable contribution.
April 1, 2022 at 11:39 pm
If you did not make any money or lost money in trading then you can enter 0 in the capital gains box in the Zakat Calculator.
June 15, 2022 at 12:22 pm
Thanks Once again For your relentless efforts you are putting here to answers our questions. Allah will bless you with greater ajar insha allah.
Continuing from my question couple of month ago.
Does my remaining amount( after suffering 50% loss ) will be chargable for zakat as investment(bond or stock)? Or zakat is applicable on gain of capital (capital gain) on my future equities which is 0 infact at the moment.
Moreover please keep in mind that I invested with intention that I will be able to gain something from futures and then use all investment + earning+ cash in hand to construct my personal home. So after suffering heavy loss I am seeking loan from family to complete my home construction ariund 40 packs PKR which I lost in trading.
So what is right way to calculate zakat on that particular investment (futures investment) in my case.
June 15, 2022 at 2:11 pm
Thank you for your very kind words and prayers.
If you conduct futures/equities trading as a professional trader then an ijtihad can be made to consider the initial investment as a means of production and only pay zakat on the capital gains. However, such situation is only applicable to very few traders. Generally such traders have trading certifications, licenses with the state, several years of experience, etc.
If you don’t consider yourself a professional trader then the total current value of all of your assets is subjected to the assets zakat at the rate of 2.5% per year, in addition to any 5% or 10% zakat on any earnings.
Please keep in mind that taxes paid to the government are deductible from your total zakat obligation. Depending on one’s country of residence and taxes paid, the zakat amount is generally minimal if anything after tax deduction.
June 16, 2022 at 2:43 pm
Thanks faisal for your detailed answer.I got your Point but my situstion is bit diff here.
I sold my flat last year to construct my home(no other property at the moment) i kept half money in cash to start work and remaining half I invested in futures trading so that to avoid money depreciation and have some profit so that to complete the work easily. Unfortunatrly I lost half of that invested money so as I am taking loan to complete house work.
Bottom line is my investment + gain on investmemt are meant to be used in construction work ultimately. As for personal home construction money cash are exemoted on zakat. Dont you think my futures equity also exempted in this case.
Keep in mind that I have other assets as well on which I am paying zakat like jewlary as I am not looking to sale them for construction work.
Thanks once again for your valuable efforts.
June 16, 2022 at 3:33 pm
The actual exemption is for personal use items, including jewelry, house, cars, furniture, etc. When someone sells one such property to buy or construct another one, then the matter could be very simple. However, when the money received from such a sale is used for trading or other investments then it has been repurposed and in principle it can’t be exempt from zakat.
June 16, 2022 at 5:02 pm
Thanks faisal bhai,
Got your point.
What about My other half of capital (cash) which i was using for my home construction . It was solemly meant for construction and will be consumed completely for the same purpose.
I am little confuse now , I raised same question(for cash to be used in personal home)seperately in april and recieve answer that as this money meant for personal home(basic need) then it is exempted from zakat.
May allah reward your efforts with great ajar.