Should I Try to Have the Interest Waived When I Pay Back a Bank Loan?

Do I Have to Pay Zakat on the Money in My Company?


Hanafi

Answered by Ustadh Tabraze Azam

Question: Assalam alaykum

I have to calculate how much I have to pay in Zakat.
I have some money in my private bank account. I am owner of a car shop where we have cars for sale, and we have a bank account for the company. I can’t use the money in the company for personal use.

We are 2 owners.

Do I have to pay zakat on the cars and the money in the company?

Answer: Wa alaikum assalam wa rahmatullah,

You need to pay zakat for your personal wealth, and your proportionate share of the company. The latter depends upon the nature of the agreement between its partners, but generally, each will be expected to pay their respective share.

As for liabilities, you may deduct any due debts and expenses. With regards to debts, it is best to deduct only the upcoming payment, yet it is permissible to deduct the entire lunar year’s worth of payments.

Note that it isn’t a requirement for zakat to deduct your liabilities. Rather, it is permissible, and if it won’t adversely affect your other needs, it is superior to give more in charity, making payments which are even more beneficial to the poor.

For assistance in calculation, please see: zakat calculator

See also: Zakat: How to Calculate & Whom to Give and: Is Your Zakat Due? – A Reader and Resources on Giving Zakat

And Allah Most High alone knows best.

wassalam,
[Ustadh] Tabraze Azam

Checked and Approved by Shaykh Faraz Rabbani

Ustadh Tabraze Azam holds a BSc in Computer Science from the University of Leicester, where he also served as the President of the Islamic Society. He memorised the entire Qur’an in his hometown of Ipswich at the tender age of sixteen, and has since studied the Islamic Sciences in traditional settings in the UK, Jordan and Turkey. He is currently pursuing advanced studies in Jordan, where he is presently based with his family.