Source: http://qa.muftisays.com/?2790
Question ID: #2790
 
Question: zakaat and borrowing
Salaams,

Please can you clarify below..

1. I pay into a company pension scheme where my deductions are compulsory, i have to pay into it monthly and my employer makes a contribution monthly too. Do i need to pay Zakaat on this?

2. Do i need to pay zakaat on money i have lent to someone? or does the person who has borrowed the money from me have to pay zakat for it. e.g i have lent a family member 10000 pounds to help him in his business, i dont need this money so dont ask for it however he has had the money for maybe 2 years or so, and he will pay me once he gets comfortable in his business or if i need it in an emergency?
 
 
Answered by: Ulamaa ID 04 (London)
Date: 15/05/2012 23:21pm

Bismillah

Al-jawab billahi at-taufeeq (the answer with Allah's guidance)


1) There is no Zakat on Provident/Pension funds. Zakat will only be Fardh when these amounts are received and they are equal to or in excess of Nisab, and further, they are retained for a full Islamic year. There is no Zakat for the years that have passed before receiving these amounts. This is known as Da'eef (insecure loan).

2) If cash, gold or silver has been given as a loan or when merchandise has been sold on terms and the payment is received after a year or two; and the value of the amount owing is that of Nisab, then this is called a Qawi (secure loan), and therefore, Zakat for those years prior to payment will be Fardh.

(Nurul Idhah Pg. 155, Ahsanul Fataawa Vol.7 Pg.50)


And Only Allah Ta'ala Knows Best.
Mufti Qamruzzaman

London, UK
 
www.MuftiSays.com