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Zakat On Shares

Q:

Assalam-u-alikum

I have taken a 3 year interest free employment loan of 80,000 riyals from my company (employer) on 1st January 2016. The loan is repayable over a period of three years and hence each month a monthly installment of 2,222 riyals is deducted from my salary.

I have invested the loan in the public company shares as a long-term investment to earn dividends and hence bought 80,000 shares (1 riyal each) in a company doing halal business. I will be paying zakat on 31 December 2016.

Now my question is on 31 December 2016, on which of the following amounts of shares I am liable to pay zakat.

1. Total value of 80,000 shares I bought from the loan amount as those are in my possession although against the loan amount.

2. To the extent of the value of the shares 26,664 (2,222 x 12= 26,664) ? I.e. the amount of installments I would have paid by the year end 31 December 2016 and deducted from my salary.

Thanks & Regards Khurram Shahzad

A:

Alaykum Salaam.

In your case only Khums would be applicable and even that will start applying after you have paid back your loan of 80,000 riyals.
Kindly refer to this link for further explanation – http://askanalim.org/node/1072

For further clarification if required, please do not hesitate to revert.

Ask An Alim Team