Should he pay zakaah on the profits only or on the capital too?

Should zakaah be paid on the returns only or on both the capital and the returns?.

Praise be to Allaah.

Zakaah must be paid on both the capital and the returns, if the capital reaches the minimum threshold (nisaab) and one full zakaah year has passed since it was acquired, because the profit is connected to the capital, and is subject to the same rulings.

If a person has some money that he invests in trade, then he makes a profit during the zakaah year, what he has to do is add that profit to the capital and pay zakaah on the total, when one zakaah year has passed since the capital was acquired.

The scholars of the Standing Committee (9/356) were asked: I have money that reaches fifteen thousand (15,000) riyals, that I gave to a man to trade with on the basis that he would have half of the profit. Is there any zakaah on this wealth? And on what should zakaah be paid – the capital, the profit or both? If zakaah is due on the capital and the capital has been used to buy trade goods such as carpets, furniture and the like, what is the ruling in this case?

They replied: Zakaah is due on the wealth mentioned that was set aside for the purpose of trade, when one zakaah year has passed since it was acquired. Zakaah must be paid on the capital and the profits at the end of the zakaah year. If the money was used to buy trade goods, their value should be worked out at the end of the zakaah year at current prices, and zakaah must be paid at a rate of 2.5% of the total of the wealth plus the profits. End quote.

Shaykh ‘Abd al-‘Azeez ibn ‘Abdullah ibn Baaz; Shaykh ‘Abd ar-Razzaaq ‘Afeefi; Shaykh ‘Abdullah ibn Ghadyaan.  Continue reading

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Should he lend money to his sister when he knows that she is going to pay back the loan with haraam money?

May Allah bless you for this good website. My question is:
My husband’s sister gets unemployment benefit from France, but she goes against the conditions for getting this assistance. For example, she lives in Algeria with her husband, who has a job, but she lied and told them that she was living in France and that her husband was not working. And she avoids having interviews with them on the grounds that she is pregnant at the time. The problem is that my husband has lent her some money to buy a house, on condition that she pay him back in instalments from the money that she gets as assistance. Please note that she is able to rent a house, because her husband has a good salary. 
I want to know whether there is any sin on my husband, because he knows the source of this money? What is the ruling on the money that he takes from her as repayment of the loan? 
If my husband’s sister wants to repent, does she have to return this money? 
I would like you to advise our Muslim brothers who take this assistance, which I call it a test or trial, because it weakens their character and religious commitment, and they become followers of the kuffaar and are treated in a manner about which the least that may be said is that it is despicable.

Praise be to Allaah.

It is not permissible for your husband’s sister to get the unemployment benefit mentioned, because she has gone against the conditions of entitlement. The money that she has taken is haraam, and she has to return it to its rightful owners. But there is nothing wrong with your husband lending money to her, even if he knows that she is going to pay back the loan with this money, because he is taking the money in a manner that is acceptable according to sharee‘ah, and the sin is on the one who acquires it; the loan is the responsibility of the borrower and there is no deal concerning the haraam wealth itself.

Dr. ‘Abdullah ibn Muhammad al-‘Imraani was asked about a man who lent someone some money, and he wants to ask for it back now, but the person who borrowed it is going to pay it back with haraam wealth. He replied: The borrower has to pay back what he owes of debts with whatever he earns in a permissible manner. The lender has the right to ask the borrower to repay the debt without asking about how he acquired the money.

If the borrower gives the lender money that is haraam in the way in which he acquired it, it is permissible for the lender because the way he is acquiring it is different, and the sin is on the borrower.  Continue reading

After their mother died they were not sure whether she used to pay zakaah on the basis of weight or estimation; what should they do?

My mother has passed away and she had gold that she had kept for a while; some of it she was keeping for us and some of it was just for her. She used to pay zakaah on it, but we are not sure whether she used to weigh the gold and pay zakaah on it, or she used to estimate it without weighing or calculating, especially in the last five years, because during this period she was ill with a sickness that sometimes affected her focus.
Now we want to find out whether we should pay zakaah on this gold for this year only or for the other years for which we are not sure about her zakaah. Will this discharge her obligations if she fell short in working out the amount of zakaah because of some lack of knowledge on her part? Thank you very much.

Praise be to Allaah.

Firstly:

There is nothing wrong with paying the zakaah on jewellery on the basis of estimation, if the person thinks it most likely that he has paid the amount required. For more information please see the answer to question no. 145091Continue reading

If the cash is a little more than the nisaab, does one have to pay zakaah on this additional amount?

I have some money that has reached the nisaab (minimum threshold at which zakaah becomes due) and there is some extra money that does not reach the nisaab. Do I have to pay zakaah on this extra cash or it is not obligatory unless it reaches the nisaab?.

Praise be to Allaah.

If the cash reaches the nisaab and one year has passed since it was acquired, it is obligatory to pay zakaah on the entire amount, at the rate of 2.5%.

It says in Haashiyat al-‘Adawi ‘ala al-Kifaayah (1/481): No zakaah is due on gold if it is less than twenty dinars. If the number of dinars reaches twenty, then half a dinar must be given in zakaah. If there are more than twenty dinars, he should give the same percentage as zakaah, even if it is a small amount. End quote.

Ibn Muflih said in al-Furoo‘ (2/322): Zakaah is obligatory on any amount of money that exceeds the nisaab, at the same rate. End quote. Continue reading

Does the father have to pay zakaat al-fitr on behalf of his children if they live with their mother?

Does the father have to pay zakaat al-fitr on behalf of his children if they live with their mother?.

Praise be to Allaah.

Firstly:

Zakaat al-Fitr is an act of worship that the Muslim is obliged to perform by himself or through his deputy or proxy. This has been discussed in the answer to question no. 99353

Based on that, the husband is not obliged to pay zakaat al-fitr on behalf of his wife or his parents. But in the case of his children, if they are adults of sound mind, he does not have to pay zakaat al-fitr on their behalf either, whether they are rich or poor. But if they are still minors, if they have their own wealth then they should pay zakaat al-fitr from their wealth; if they do not have any wealth then zakaat al-fitr should be paid on their behalf by their father, even if they are in the mother’s custody.  Continue reading

He forgot to pay zakaat al-fitr before the Eid prayer

What is the ruling on one who forgets to pay zakaat al-fitr and does not remember until after the Eid prayer?.

Praise be to Allaah.

There is no sin on him because he is excused for his forgetfulness, but he has to pay it when he remembers it.

Shaykh ‘Abd al-‘Azeez ibn Baaz (may Allah have mercy on him) was asked about someone who forgot to pay zakaat al-fitr on time, and he replied:

There is no doubt that the Sunnah is to pay zakaat al-fitr before the Eid prayer, as enjoined by the Prophet (blessings and peace of Allah be upon), but there is nothing wrong with what you did; paying it after the prayer is acceptable, praise be to Allah. Even though it says in the hadeeth that it is ordinary charity, that does not necessarily mean that it is not valid and was not done appropriately. So we hope that it will be acceptable and be regarded as proper zakaah, because you did not delay it deliberately; rather you delayed it because you forgot, and Allah, may He be glorified and exalted, says in His Book (interpretation of the meaning): “Our Lord! Punish us not if we forget or fall into error” [al-Baqarah 2:286]. And it is proven that the Prophet (blessings and peace of Allah be upon him) said: “Allah, may He be glorified and exalted, says: I will do that.” So He has answered the prayer of His believing slave not to punish them if they forget or fall into error.  Continue reading

Should he pay zakaat al-fitr on behalf of an orphan on whom he is spending?

If people are taking care of an orphan, do they have to pay zakaat al-fitr on his behalf?.

Praise be to Allaah.

Firstly:

If this orphan has wealth, such as inheritance or charity that is given to him, then his zakaat al-fitr should be paid from his wealth. Al-Nawawi (may Allah have mercy on him) said: … As for the orphan who has wealth, his zakaat al-fitr should be paid from his wealth, in our opinion. This is the view of the majority, including Maalik, al-Awzaa‘i, Abu Haneefah, Abu Yoosuf and Ibn al-Mundhir.

End quote from al-Majmoo‘, 6/109

But if he does not have any wealth, rather it is you who are spending on him and providing what he needs, then you do not have to pay zakaat al-fitr on his behalf, because zakaat al-fitr is only obligatory upon the one who is obliged to spend on him. As for the one who is not obliged to spend on him but is doing so voluntarily, he is not obliged to pay zakaat al-fitr on his behalf.  Continue reading

Should he take a riba-based loan if he does not intend to pay the interest?

My question is: Someone lives in a foreign country wants to take a mortgage from a bank there. Then he will return to his country and use the money for business. Then pay the mortgage back without interest. If he takes for example $10000 by $5000 interest, he will pay it back only as $10000 to avoid the interest. Will this be considered stealing if they agree that he must pay the interest? Even if the bank is not Islamic?.

Praise be to Allaah.

Firstly:

A loan agreement that includes riba is a haraam contract according to sharee’ah, and it is not permissible to enter into it, even if the borrower intends not to pay the interest. The Prophet (peace and blessings of Allaah be upon him) cursed the one who consumes riba and the one who pays it, the one who writes it down and the two who witness it, and he said: they are all the same. Narrated by Muslim (1598).

Signing an agreement to pay riba and entering into the contract implies that one is committing to paying the riba that Allaah and His Messenger have forbidden, so he is included in this stern warning.  Continue reading

Should he sell his house to an Islamic finance company to pay off the remainder of a riba-based loan?

I live in Canada. Five years ago we committed the crime of buying our house through an interest based mortgage from a local bank here. Relying on many fatawa of scholars here (may Allah forgive them!). 
Two years ago Allah guided us to Islam like if we just knew it. Recently, some Islamic (as they claim) financing companies here started to appear. 
The following is an explanation of their way to convert an interest based mortgage to Islamic financing, based on cooperating: the Islamic company deals with a bank that deals with interest to finance their project. This Islamic company says that its relationship with the bank is not a Riba relation, it is a trade relation.
This company values the house in the local market; an appointed person licensed by the government does this valuation matter. 
The monthly amount I have to pay is based on the rest of the loan I took and the profit which is about 4.9%. 
Some of this monthly amount I pay goes as profit, and the rest is to be discounted from the actual price of the house. The Islamic financing company’s share is the difference between the price of the house now and what is remaining to be paid of the interest-based loan. The company evaluates the price of the house every one, two or five years. Their share of profit changes according to the number of years I choose. This means that the nisbah of profit is fixed, but the share of every one of us gets evaluated every few years. 
What remains of the mortgage (their share of the house) is $178.000, their profit in the first five years is 49038.88$, and I own of the house what equals 18408.08$ of the house which cost is $178.000. 
The relationship between the company and the bank is unclear. It depends in its essence on buying money with money; as they did not buy the house formally. All these transactions are only on paper between the company and the bank. The house actually has nothing to do with these transactions except that it is mentioned on papers between the two sides. We are really confused, we hope you enlighten us.

Praise be to Allaah.

We ask Allaah to reward you with good for your keenness to seek what is halaal and to rid yourself of the effects of what you did by taking a loan from the riba-based bank. We will answer your question as follows:

Firstly: consuming riba and helping others with it is haraam and is in fact a major sin. Muslim narrated in his Saheeh that Jaabir (may Allaah be pleased with him) said: The Messenger of Allaah (peace and blessings of Allaah be upon him) cursed the one who consumes riba and the one who pays it, the one who writes it down and the two who witness it, and he said: they are all the same.  Continue reading

He needs to pay the rent and he cannot find anyone who will lend him money; can he take a riba-based loan?

If a man needs money to pay his household expenses, or to pay rent on his house etc, and he cannot find anyone to lend him money or from whom he can borrow, is it permissible for him to borrow from the bank?.

Praise be to Allaah.

If borrowing from the bank is done in a shar’i manner, such as taking a loan which he will pay back with no interest, or he buys something from them to be paid for at an agreed time – even if that is for more than the current price – there is nothing wrong with that. But if he borrows from them on the basis of riba (interest), this is not permissible, because Allaah has forbidden riba in His holy Book, and in the Sunnah of His noble Messenger (peace and blessings of Allaah be upon him), and has issued a warning concerning it that is not mentioned with regard to eating dead flesh and the like. Allaah says (interpretation of the meaning):

“Those who consume Riba will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaytaan (Satan) leading him to insanity” [al-Baqarah 2:275].   Continue reading