zakat on share and income
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about zakat on share and income in malaysiaTRANSCRIPT
ZAKAT ON INCOME AND ZAKAT ON SHARES
Zakat on Income• Additional payment receive by an individual from their employer or
individual itself in the form of physical energy or professional employment or physically for specific day, month and yearly also been required to pay zakat.
• Prof. Dr. Yusuf al-Qaradawi and Dr. Hussein Shahatah, pay zakat and income termed Mustafad Zakat al-Mal which is sourced from Zakat salary and professional income. It is the reward of service with an employer or an individual or institution.
Meaning :“ To all men who are all faithful to Allah . Give out the best what you have work for and this is part what comes from the earth that we have given you."
(Surah Al-Baqarah : Ayat 267 )
Condition• Income will include :
Salary
Arrears of pay
Various allowances (car, meals, meetings)
Income
Others (including bonus or something that can be counted as income such as royalties, rent and other)
• Pay and free income must be counted based on the following conditions: Islam
Independent
Complete ownership
Nisab
Haul
Lawful income
CALCULATION OF ZAKAT INCOME
METHOD 1
Using gross income (without deduction) 2.5% on gross income
per year.
METHOD 2
Using the net income (Income
year less allowable
expenses per year) x 2.5%
Method 1
Method 2(A) GROSS INCOME PER YEAR (RM)
Basic salary 42,000
Various allowances 10,000
Other income 6,000
Total income 58,000
(B) (-) HAD KIFAYAH PER YEAR (RM)
Himself 10,850
Wife 6,000
His parent ( 2 person ) ( RM2300 each ) 4,600
His daughter ( 7-11 years old ) ( 2 person ) ( RM 2,200 ) 4,400
His daughter ( 0-6 years old ) ( 1 person ) ( RM 1450 ) 1,450
(C) ( - ) ADDITIONAL HAD KIFAYAH ( RM)
Disable children ( no example ) ( RM2,400 each ) -
Chronic deseases ( no example ) ( RM2,400 each ) -
OTHER DEDUCTIONS (RM)
EPF contributions 5,170
Contributions fund for HAJJ 2,000
Total deductions ( B + C + D ) 34,470
THE AMOUNT OF ZAKAT (RM)
A - ( B + C + D ) = E ( More Than Current Nisab )Nisab For 2015 = RM11,145
23,530
Zakat Per Year ( RM23,530 X 2.5 %) 588.25
Zakat Per Month ( RM588.25 / 12 ) 49.00
Zakat On Shares• Dr Yusoff al-Qardhawi in his book Fiqh-Zakat defines shares as valuable
papers or commodities that are traded in the market such as Bursa Malaysia.
• Zakat which is given out for investment which has reach its time limit and minimum value.
• O you who believe! spend (benevolently) of the good things that you earn and or what We have brought forth for you out of the earth, and do not aim at what is bad that you may spend (in alms) of it, while you would not take it yourselves unless you have its price lowered, and know that Allah is Self-sufficient, Praiseworthy.
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Condition Zakat Of Shares
• Include only those shares and bonds that you owned on the last day of the previous zakat year, and use the market value as of that date. Purchases made during this year should not be included in this.
• Include all shares and bonds that you owned on the last day of the current zakat year, and use the market value as of that date.
• Include only those earnings that occurred within the zakat year, then exclude that portion from the earnings.
• Include all associate expenses, including estimated income tax on earnings and capital gains.
Listed companies (from Syariah Councils)
Shares owned at the end of haul period
2.5 percent on the lowest market price of the share
Shares traded during the haul period
2.5 percent on the net profit (capital gain)
Types Of Zakat On SharesI. Share that is still owned until the end
of haul.
*The calculation of Zakat is 2.5% on the smallest price or cost.
Sample calculation for 200 lots of share :
1 lot : 100 units
1 lot : RM1.00
200 lots :
= 200 lot x RM1.00
= RM20,000.00
Zakat :
= RM20,000.00 x 2.5%
= RM500.00
Non-listed companies (from Syariah Councils)
Difficulties to determine the market value
Zakat is calculated based on the dividend received
II. Share that always trade in the duration of haul (a year)
*The calculation is 2.5% on the value of share after deducting the expenses cost (profit).
Sample of calculation :
Total value of selling share – expenses cost (profit)
= RM500,000 – RM400,000
= RM100,000.00
Zakat :
= RM100,000 x 2.5%
= RM2,500.00