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Long term investing in stocks


Alaikum wa-Rahmatullah wa-Barakathu Team,

I had 2 questions regarding Khums on stocks where I wanted to gain a better understanding of the long-term approach to Khums liabilities. Assuming that my yearly khums date is Nov 30th and I plan to invest in stocks this month (In September 2021).

If I want to invest e.g $1000 in Sep 2021, $1000 in October 2021, $1000 in November 2021, should I pay khums that is liable from Nov 30th 2020 to August 30th 2021 (9 months) and then use the “khums free” money for the investments in Sep, Oct, Nov 2021? OR should I pay the khums on the $3000 that I intend to invest in ($600 for Khums) and then invest $800 in each month of Sep, Oct, Nov accordingly where at the end of the annual year (Nov 30th), I will be liable to pay on my savings from Nov 2020-Nov2021 accordingly.

Suppose I have invested $1000 into the stock exchange market and left the investment for 5 years and decided to sell the stocks after 5 years, how would the khums liability work? Am I liable to pay khums on the profit increases based on my initial investment of $1000 at every year’s due date? (what if there was a loss in the stock value?) OR, would khums be liable to be paid at the time of withdrawing the funds after the 5 year period? If khums has to be paid on every year’s profit gain, would it be in relation to the previous year’s stock rate (at the time of paying our yearly khums) or in relation to our initial investment of $1000?


Initial Investment = $1000
Year 1 – Stock Increased to $1200
Year 2 – Stock Increased to $1900
Year 3 – Stock DECREASED to $800 (Less than initial investment ) ——> How would we approach this case if, we are paying khums  on yearly profits
Year 4 – Stock Increased to $1600
Year 5 – Stock Increased to $2000


Year 1: Pay khums on $200 profit?
Year 2: Pay khums on $900 profit (from initial investment) OR Pay khums on $700 profit from the previous year?

Can you please clarify the different approaches individuals can take especially when their yearly khums period is not yet over and how to go about fulfilling the obligations? I believe this would significantly help myself as well as all brothers and sisters.

Jazakallah Khair


Wa Alaykumussalam

Thank you for your question


Answer 1: Whenever it is the date of Khums, you must pay Khums on all of the amount you have. That means assuming your khums date is 30th November and  if you have $3000 on that date, you must pay Khums on this whole amount.


Answer 2: You have to pay the added value of that capital every year. And if you haven’t paid, then whenever in the future you want to sell it, you should consider this and pay one fifth of the profit from the first year.

So in the mentioned case if the khums has already been given on the $1000(initial amount), in the first year you will have to pay khums only on the additional profit which is $200 and for the second year you will have to pay khums on the $700 which was profit on the capital $1200 from the last year, and the same way for the next years.


Regarding the last part of your question, you can use the money where you want before the khums date in any Halal manner. You can buy things, you can gift it to your family etc. But whenever the Khums date comes, you have to pay the khums on the total surplus you have.
Khums given once on the particular amount like investment(as mentioned above), you will not have to pay the Khums on that particular amount again if that money was untouched.

Also, we must be careful while investing in stocks, making sure the money is used in a Halal way and not for the Haram purpose.


May Allah(swt) grant you success


Syed Haider