Page 177 - Taleemul Haq New Edition

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If any such loan is not equal to Nisaab then Zakat will not be Farz; but if this loan
together with other excess wealth which is in one's possession when combined becomes
equal to Nisaah' then Zakat will be Farz on the combined total of both amounts.
(Insufficiently secure loan)
If a loan is not cash, gold, silver or merchandise (as mentioned in 1. (a) above) but is
personal effects sold (old clothes, house-hold items etc. ) or is a property which was sold
and the value of it is that of Nisaab, then it is called a Mutawssit loan. Thus Zakat for
those years prior to payment will not be Farz.
If this loan is equal to or in excess of Nisaab and is fully recovered after several years,
then Zakat on that amount is not Farz for all the past years. However, if anyone in such
an instance gave Zakat, then such an act is rewarded by Allah Ta’aala.
In a case where the repayment is made in installments, then Zakat will only be Farz if the
repayment is equal to Nisaab and is retained for a full Islamic year.
If the installment received is less than Nisaab, but one is in possession of other wealth on
which Zakat is due (i.e. Nisaab on which a year has elapsed), then this installment must
be added to the wealth, and Zakat must be given on the total. It is not necessary for a
year to pass over this installment that is received.
(Insecure loan.)
If money owing to one, is not in lieu of cash, gold, silver, merchandise or personal effects
or property which is sold; but is due to outstanding inheritance, bequests, Meh'r (dowry)
salary etc., then it is called Dha'eef loan.
Zakat will become Farz when these monies are received and they are equal to or in excess
of Nisaab and further they are retained for a full Islamic year. There is no Zakat for the
years that have passed before receiving these amounts.
There is no Zakat on Provident and Pension funds. Zakat must only be paid on this
amount after they are received from such funds provided the amount is equal to or in
excess of the Nisaab and is retained tor a full Islamic year.
NOTE: Some Ulama have categorized these funds as Qawi or Mutawassit loans,
and thus Zakat becomes obligatory on the contributions for the past year as well.
It is therefore advisable that as a precautionary measure Zakat should be paid for
the past years on these as well.
Articles that are purchased for resale are referred to as merchandise. The Nisaab for
Zakat on merchandise is the same as that for cash, i. e. if the value of the articles is
equivalent to the value of 87, 48 grams of gold (7, 5 tolas =1350 grains =2, 8125 troy.
ounces) or 612, 36 grams of silver (52, 5 tolas = 9450 grains =19, 6875 troy ounces), or
more, that it will be Fardh to give Zakat at the rate of 2, 5% or one fortieth.
Zakat is Farz on the following items when crowing up a balance (calculating) sheet:
Stock in trade;
Goods in transit; (which have been paid for)
Cash on hand;
Outstanding cash and loans; (when repaid and if they are equal to Nisaab)