Calculation of Zakah : calculation of Zakah on business

Fatawa Question

Asalam Alaiikum Wa Rahmatullahi Wa Barakatu. InShaAllah this reaches you in the best of health and the highest state of Iman. I was actually referred to you by sheikh Shinqiti, because of the fact that there is a brother here that owns a business and he is leaving to over seas on Saturday inshAllah. Now he wants to figure out the Zakah that he owes on his business before he leaves so that he may pay it. Originally I called sheikh Shinqiti and asked him if he could kindly figure out the Zakah for this brother and he said that any time there is a financial question he refers it to you because you are the most knowledgeable in this field. InshAllah if you could help me by calculating and informing me how much the brother owes in Zakah that would be greatly appreciated. The following are the figures that the brother forwarded to me in regards to his business financials : Zakah 1. Fam inventory cost = $1,961,000 (I suppose this inventory are goods for sale. There are not farm automatic machines in a farming business because Zakah is calculated differently on farming) 2. All loans and acct. receivables = $ 1022,707 ($ 327,000 Aziz Owes) (Net= $ 695,707) (I suppose Aziz is the owner and this is his withdrawal account; also other receivables are good and expected to be collected on time or are now sold to a new owner as part of selling the business) 3. All banks / stocks / deposits / cash / etc. = $726,330 4. misc. jewlery, furniture, 3 house holds, etc. = $100,000? (household furniture, appliances and other normal things including a reasonable amount of decorative things are exempt from Zakah ; also women jewelry provided there are normally utilized and comparable to the owner's peers, office furniture and the like should be included in Zakatability according to my opinion, majority is on their exclusion, Misc needs detailed explanation) (overall, there is over charging in this item) net = $ 3,843,037 (typing error, should be 3,483) 1. Accts. Payable properties = $ 2247,500 (what is "properties" here ? A mortgage on residence or other real estate property should not, in principle, be deducted. This means it can't reduce the amount of Zakatable assets) 2. All other A / P ( tax sales, MAFS, C.C.) = $ 675,650 TOTAL = $ 2,923,150 net = $ 559,887 = $ 14,000 If you could please help me out with this it would be greatly appreciated, I know it is last minute because the brother is leaving out of town on Saturday, and I apologize for that. If you could get back to me at your earliest convenience it would be greatly appreciated. Jazak Allahu Khairan May Allah (swt) reward you with the best of this life and the hereafter. Wa Salams your brother

Fatwa

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Publication Date

2006-06-13

Main Subjects

Economics & Business Administration
Islamic Studies

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-792332

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