Zakah on money that has reached the lunar year of possession
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Fatwa number ( 18285 )
Q: We are a commercial institution that engages in installment sales. Generally, the sales are on monthly installments over a period of three years, according to a profit rate agreed upon when the contract is concluded. The monthly installments are recovered and reinvested by purchasing goods and reselling them on installments. We ask your Eminence to inform us of the method by which the obligatory zakah is calculated in such an activity. Peace be upon you, and may Allah have mercy upon you and bestow His blessings.
A: Zakah is obligatory on money that has reached the lunar year of possession and is in the possession of its owner. The same applies to money that is a debt owed by people who are able to pay and are not delaying payment, whether it is deferred for a single term or deferred in installments. Likewise, zakah is obligatory on goods prepared for sale if the lunar year of possession has passed on the value for which they were purchased.
And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: We are a commercial institution that engages in installment sales. Generally, the sales are on monthly installments over a period of three years, according to a profit rate agreed upon when the contract is concluded. The monthly installments are recovered and reinvested by purchasing goods and reselling them on installments. We ask your Eminence to inform us of the method by which the obligatory zakah is calculated in such an activity. Peace be upon you, and may Allah have mercy upon you and bestow His blessings.
A: Zakah is obligatory on money that has reached the lunar year of possession and is in the possession of its owner. The same applies to money that is a debt owed by people who are able to pay and are not delaying payment, whether it is deferred for a single term or deferred in installments. Likewise, zakah is obligatory on goods prepared for sale if the lunar year of possession has passed on the value for which they were purchased.
And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.