Is zakat due on money invested in a company for seven years, and is it to be paid for the past years or as a lump sum on the total amount?
on wealth becomes obligatory for its owner for the past seven years if it reached the legal (threshold) at the time it was given to the company. Zakat is due on the capital and its profits if the wealth was intended for buying and selling. However, if the wealth was given to the company for the purpose of trading in its yield without touching the principal, then zakat is obligatory only on the yield if it reached nisab.
How to calculate zakat for the seven years: 1. If we say it is a debt (due on one's liability): One-quarter of one-tenth (2.5%) of the existing wealth is paid for each year equally. 2. If we say it is due on the wealth itself: One-quarter of one-tenth is paid for the first year and then deducted. Then, one-quarter of one-tenth of the remaining amount is paid for the second year and deducted, and so on, until the zakat for all seven years is calculated.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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