Zakat Taxation Questions

[AbdiWahab252]

Greetings Rer Somalinet,

Do you know of any good resource on calculating your Zakat tax? Is it applicable on assets in hand like stocks, cash in bank accounts only? Or would it be applicable on the value of deferred assets like annuities, retirement accounts (that you can only access after retirement age)? Can one not pay zakat if they having negative networth (liabilities exceed assets)?

JazakAllah!

[AwRastaale]

HG paying zakat?

Must be doomsday.

Isbaaro money is not halal. Zakat is not permissible.

[AbdiWahab252]

If I have questions about Ethiopian Orthodoxy I will be sure to ask you Aw Raastle

[Asharite]

Greetings Rer Somalinet,

Do you know of any good resource on calculating your Zakat tax? Is it applicable on assets in hand like stocks, cash in bank accounts only? Or would it be applicable on the value of deferred assets like annuities, retirement accounts (that you can only access after retirement age)? Can one not pay zakat if they having negative networth (liabilities exceed assets)?

JazakAllah!

Any money that you have full possession over and is considered 'yours' is taxable. I'm assuming your dealing with hard currency. If that's the case it's simple.

If your net worth is equivalent to 85 grams of gold or 595 grams of silver, then deduct 2.5% of that wealth and give it in to a reputable Zakah organisation or spend it yourself upon the poor if there aren't any distributive organisations. Remember this is ONLY applicable if your net worth was equivalent to the amount I've mentioned for at least a period of one year. Otherwise there is no Zakah required.

[paperino]

AbdiWahab252, limit the solitary lifestyle and be part of a community. Get to know a knowledgeable sheikh or scholar, who will be more than happy to answer your questions. You can get to know him via email, phone or in person. Looking answers on the internet is akin to trying to learn Kung Fu from books or videos; only a master can teach you. And try to avoid Sufi sheikhs or scholars.

[Asharite]

AbdiWahab252, limit the solitary lifestyle and be part of a community. Get to know a knowledgeable sheikh or scholar, who will be more than happy to answer your questions. You can get to know him via email or phone (preferably). Looking answers on the internet is akin to trying to learn Kung Fu from books or videos; only a master can teach you. And try to avoid Sufi sheikhs or scholars.

If you aren't a Sufi. You are misguided.


You just came into the topic because you felt irrelevant (which you are).


My answer was based on references from the Books of Jurisprudence.

Did you think for a second I answered without a mandate?

My references:
Al Majmu' by Imam An Nawawi
Al Mughni by Ibn Qudamah
Al Minhaj by An Nawawi
Ar Rawdha by An Nawawi
Al Mabsuut by Sarkash
Bidayatul Mujtahid by Avveroes the Philosopher

[AbkoowDhiblaawe]

HG paying zakat?

Must be doomsday.

Isbaaro money is not halal. Zakat is not permissible.

If I have questions about Ethiopian Orthodoxy I will be sure to ask you Aw Raastle

these niggas man.

[AwRastaale]

HG paying zakat?

Must be doomsday.

Isbaaro money is not halal. Zakat is not permissible.

If I have questions about Ethiopian Orthodoxy I will be sure to ask you Aw Raastle

these niggas man.

Hahaha haa sxb old man is sensitive and super protective of HG.

I just know how to irritate him.

AW,

Islam would choose Orthodox man over your isbaaro any day.

After all Sahaba fled from Arab pagan isbaaro to Abbysinia to be with the halal King Negasi.

Take a lesson.

[AbdiWahab252]

Asharite

So if one has $100,000 in liquid investments, $25,000 in debts and $500,000 in deferred retirement plans that he had no access to until retirement. The 2.5% levy would be only on the $75000 because he doesn't have access to the $500,000 for several years?

Thank you!

[Asharite]

Asharite

So if one has $100,000 in liquid investments, $25,000 in debts and $500,000 in deferred retirement plans that he had no access to until retirement. The 2.5% levy would be only on the $75000 because he doesn't have access to the $500,000 for several years?

Thank you!

Absolutely. Debt is not taxable AT ALL nor is your $500,000 in retirement plans.

2.5% is levied on any money that you 'possess'. Provided it's value is equivalent to 85 grams of gold or 595 grams of silver (this is the threshold). Bear in mind, that this money has to have been at the threshold or above for at least ONE year. If during the year, at anytime it fluctuates lower than the threshold, the taxable year starts ALL over again lol

Your welcome, bro.

[AbdiWahab252]

JazakAllah Asharite!

[TheLoFather]

Asharite

So if one has $100,000 in liquid investments, $25,000 in debts and $500,000 in deferred retirement plans that he had no access to until retirement. The 2.5% levy would be only on the $75000 because he doesn't have access to the $500,000 for several years?

Thank you!

Absolutely. Debt is not taxable AT ALL nor is your $500,000 in retirement plans.

2.5% is levied on any money that you 'possess'. Provided it's value is equivalent to 85 grams of gold or 595 grams of silver (this is the threshold). Bear in mind, that this money has to have been at the threshold or above for at least ONE year. If during the year, at anytime it fluctuates lower than the threshold, the taxable year starts ALL over again lol

Your welcome, bro.

Sxb, I am just wondering, since we pay taxes on our earnings to the government who use some of it to provide welfare benefits such as income support and health services etc... to the poor and the under preveleged, should these taxes be taken into account when calculating the amount of Zakat payment that is due and can one deduct the amount of taxes paid (or a percentage of it) from the Zakat payment that is required.?

[Asharite]

JazakAllah Asharite!

[Asharite]

Sxb, I am just wondering, since we pay taxes on our earnings to the government who use some of it to provide welfare benefits such as income support and health services etc... to the poor and the under preveleged, should these taxes be taken into account when calculating the amount of Zakat payment that is due and can one deduct the amount of taxes paid (or a percentage of it) from the Zakat payment that is required.?

No. Any money that is taken from you (by law) is NOT included. Even if it's taken from you illegally, that money is not taxable to Zakah. Reason being is that money isn't in your 'possession' anymore.

Zakah has 4 main conditions:

1. The person has to be Muslim. (Zakah is not compulsory on non Muslims).
2. Complete possession of the wealth ( this doesn't include partial possession/debts/stolen money/lost money etc).
3. The wealth should be at the minimum taxable threshold (equivalent to 85 grams of pure Gold or 595 grams of pure Silver for a complete year, which is:
4. A complete annual cycle has passed on the money i.e so much so that any money that fluctuates at anytime during the year to any amount beyond the threshold, if the money rebounds back to the threshold or above it, the taxable Zakah year starts from the beginning again.