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Zakat Obligation After Liquidation Of Assets
I moved from my residential property to a rental house and sold that residential property, and I sold another property which I inherited from my father. I used to receive rent from that property, and I consumed that rent for household expenses month wise, but I’ve sold it too. Now I’ve liquefied my both assets and since I’m not working and I have no source of income, I’m utilizing that money for domestic needs. Tell me about zakat in my regard?
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Zakat Obligation After Liquidation Of Assets
updated 12 months ago
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Currently, you only have wealth with you and no earnings therefore only zakat on wealth/zakat on Assets will be applied in your case which is 2.5% of you wealth at year-end (year-end could be any date fixed by you for the purpose of Zakat calculation and it cannot be changed later on). Items of personal use, means of production and Wealth below Nisab are exempt from Zakat. (Nisab for assets/wealth is the minimum amount below which your state exempts tax or zakat on assets. If your state does not provide a nisab then you can use the standard nisab of 642 grams of silver or equivalent value).
However, when you were earning rent on the house then you should have paid 10% Zakat on gross rent if either labor/maintenance expenses or capital were expended or 5% Zakat on gross rent if both labor/maintenance expenses and capital were being expended. This is called Zakat on Production or Zakat on Earnings which is different from Zakat on Assets. Now that you don’t have any resources and the mistake was was unintentional and because of lack of knowledge then you are not under obligation to pay on previous earning, however, with an extra charity you can try to earn the pleasure of God and makeup for any unpaid Zakat in this regard. A Muslim is obligated to do the things after he comes to know of an obligation.
For more details on Zakat, you can read the following which explains the process of calculating Zakat:
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