Zakat on investments and giving it in advance

I have invested in a business as a partner in a company. I put money into the company few months ago, I am going to be taking out zakaat in the month of Ramadan, however I will not find out if we have made profit or loss until March, which is like 9 months down the line. I wanted to know if I had to pay zakaat on it, when will I have to pay zakaat on it. If I have to pay zakaat now then on what will I have to pay zakaat on, invested sum amount or an estimate on how much I might have made, or should I wait till march when I will find out. Please advise me on this matter as well.

In the name of Allah, the most Beneficent, the most Merciful.

Answer

Zakat is obligatory on the amount of money you invested into the company and also on the profit gained, as long as one lunar has passed. (Fatawa Darul Uloom Deoband p.142 v.6 & Aapke Masaail p.361 v.3)

Regarding your situation as you have just invested into the company a few months ago, zakat is not obligatory upon you yet. You need to wait for one full lunar year to pass before you give zakat.

However, if you want you can give your zakat in advance if the following three conditions are met:

  1. He is confident that he will have Nisab for the whole year.
  2. The zakatable year has already begun.
  3. During the year one’s original Nisab does not deplete. (Fatawa Rahimiyah p.159 v.5)

If you do decide to give zakat now, then it will only be given on the investment and not on the profit you think you may acquire. Zakat on the profit will be given after it has been received by you. (Aapke Masaail p.373 v.3)

Only Allah Knows Best

Mohammed Tosir Miah

Darul Ifta Birmingham

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