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Zakat On Rental Income & Salary Withdrawn From Business
Need some help with Zakat Calculator.
1. We pay Zakat on Rental Income, whereas if we have a collection of rent in our bank account and add the bank balance in assets to pay Zakat so is it not a double payment of Zakat?
2. Why we are deducing Govt. paid taxes from Zakat, we know Govt. never spend Zakat on Zakat Expenditures.
3. I didn’t find any option to deduct Payable amounts from Assets to get net asset value. Doesn’t we need to minus liabilities? if yes then where to put the value?
4. If a business owner also draws some salary and other benefits, so does he need to add his business income and salaries/benefits separately in Zakat Calculator?
5. We have one commercial plot value of 85 Million. Do we need to add in Asset and pay Zakat on it?
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6 Replies
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Zakat On Rental Income & Salary Withdrawn From Business
updated 2 years, 6 months ago
2 Members
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6
Replies
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1. The zakat you pay on rental income is production zakat. Once a year, on the due date of your zakat you also pay 2.5% zakat on savings/assets.
These two are separate types of zakat. Even when you deposit your rental income in the bank and you have already paid production zakat on it, if there’s anything left in the bank account on your due date, it is subjected to assets/savings zakat.
2. Quran verse 9:60 lists the heads of zakat which includes الْعَامِلِينَ عَلَيْهَا (al-‘amilina ‘alayha): the salaries of all employees of the state. Government uses taxes for the benefit of its citizens, even if it’s a portion thereof. Taxes paid to the governments are therefore deductible from zakat.
3. The zakat calculator assumes that you have already paid any immediate loan payments, salaries, etc. from your assets, if needed.
4. Please explain the nature of your business.
5. If a property is not in personal use then the current value of that property must be added to your assets (unless exempt by the state for any reason) and it will be subjected to zakat.
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5. Nature of Business:
This is a trading business owned and controlled by him, but as you know some businessmen set their fixed salary and other benefits to be taken/drawn from business. So should we add the salaries/other cash benefits/expenses reimbursement in the Zakat calculation separately? -
2. Taxes Paid:
Somes times taxes are deducted from the source of income ad advance tax and then settled at the end of the year and after some adjustment, the amount may increase or decrese.
So should take the current value of tax deducted from rental income as the final amount can’t be calculated accurately at this time.
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Assuming that by trading business you mean a retail business with inventory run by the owner then there’s no production zakat in such a business.
As the instructions in the Zakat Calculator state, income from such businesses should be excluded the Business Income box. Any salary, benefits, or profits that you withdraw from such business should also not be entered in the Salaries/Wages box.
Instead under the Assets tab in the Cash box you should enter the amount of cash in the business account on the due date of your zakat plus any amount thar you already withdrew for personal use (e.g. salary, profits, benefits, etc.) during the year.
Taxes paid since your last zakat due date should be used. Since you pay zakat on the same day every year, it t will automatically adjust.
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Zakat on Rental Income:
If the property is on rent and the owner is paying maintenance expenses, should it be deducted from the gross rental amount?
Say, Gross annual rent is PKR 10 million, and 0.5 million was paid for maintenance during the year.
So Zakat will be calculated on PKR 9.5 million. Right?
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Any expenses such as maintenance and mortgage can be excluded from the rental income.
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