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Should I pay zakat on principal amount pulse profit or only on profit?

Q:

Asalam u alikum.

My question is about zakat. I have invested money with my cousin in his company and he gives me a monthly profit on it. How do I pay zakat on it?

Should I pay zakat on principal amount pulse profit or only on profit? Thanks

A:
Salamun Alaykum

Thank you for your query.

I would like to clarify the 2 things in Islam, Zakat & Khums. We believe in both whereas some of the people don’t accept Khums nowadays, which had been there since the time of our Prophet Muhammad (s.a.w.w).

According to Shia aspect the following are the things regarding Zakat and Khums.

Zakat is wajib (obligatory) on the following 9 items:

Coins: silver; gold

Cattle: cows; sheep and goats; camels

Crops: wheat; barley; dates; raisins

And Khums is on the surplus to annual expenses. If your income exceeds the annual expenses of yourself and your family, Khums (20%) should be paid from the excess.

 

According to Ayatullah al-Udhma Sayyid Ali Sistany Zakat is Wajib on 10 things:

Ruling 1871. Zakat is obligatory (wājib) on ten things:

1. wheat; 2. barley; 3. dates; 4. raisins; 5. gold; 6. silver; 7. camels; 8. cows; 9. sheep [and goats]; 10. business goods, based on obligatory precaution (al-ihtiyāt al-wājib).

https://www.sistani.org/english/book/48/2280/

 

As Khums is obligatory on the surplus to annual expenses. If your income exceeds the annual expenses of yourself and your family, Khums (20%) should be paid from the excess. Khums must be divided into two parts: one part is the portion for sayyid (sahm al-sādāt), which must be given to a sayyid who is poor, or who is an orphan, or who is stranded on a journey. The second part is the portion for the Imam (sahm al-imām), which at the present time [i.e. during the time of the Imam’s (A) occultation] must either be given to a fully qualified jurist or spent for purposes that he authorises.

Khums can be paid at the office of your Marja(Mujtahid) or to any representative of your Mujtahid

Khums has been mentioned and made compulsory in Quran in Surah Anfal/41

وَاعْلَمُوا أَنَّمَا غَنِمْتُم مِّن شَيْءٍ فَأَنَّ لِلَّـهِ خُمُسَهُ وَلِلرَّسُولِ وَلِذِي الْقُرْبَىٰ وَالْيَتَامَىٰ وَالْمَسَاكِينِ وَابْنِ السَّبِيلِ إِن كُنتُمْ آمَنتُم بِاللَّـهِ وَمَا أَنزَلْنَا عَلَىٰ عَبْدِنَا يَوْمَ الْفُرقَانِ يَوْمَ الْتَقَى الْجَمْعَانِ  وَاللَّـهُ عَلَىٰ كُلِّ شَيْءٍ قَدِيرٌ

Know that whatever thing you may come by, a fifth of it is for Allah and the Apostle, for the relatives and the orphans, for the needy and the traveller, if you have faith in Allah and what We sent down to Our servant on the Day of Separation, the day when the two hosts met; and Allah has power over all things.

 

To learn about Khums, please visit:

https://www.al-islam.org/khums-islamic-tax-sayyid-muhammad-rizvi

To learn about Zakat in Shia Fiqh, please visit:

https://www.al-islam.org/articles/zakat-shia-fiqh-sayyid-muhammad-rizvi

 

Wassalam,

Syed Haider