Zakat Base with a Breached Holding, a Murabaha Liability and a Late Inheritance
Farid, 42, a salaried operations manager, has asked you to review his zakat position for the haul ending 15 Syawal. His gross salary is RM 18,500 a month. At the anniversary he reports: savings RM 210,000; a Shariah-compliant equity portfolio worth RM 480,000, of which one stock valued at RM 57,600 has just been reclassified as non-compliant because interest income has risen to 6.2% of revenue, and he received RM 2,300 of dividends from it during the year; 180 grams of gold at RM 320 a gram; trade receivables from a side business of RM 90,000, of which he judges RM 25,000 doubtful; inventory at cost RM 45,000; a murabaha home financing with instalments of RM 3,100 a month and an outstanding sale price of RM 620,000, of which RM 480,000 is unearned profit; and a car loan with 18 months left at RM 1,150 a month. He also received an inheritance of RM 150,000 three months before the anniversary. Nisab is 85 grams of gold. He intends to pay his zakat to a madrasah run by his cousin.
1. Compute Farid's zakat base and the zakat due. State the reason for every inclusion and every exclusion, and identify the two decisions in the computation where a reasonable practitioner could legitimately differ.
Read the worked answer
Nisab first: 85 g x RM 320 = RM 27,200. The base is far above it, so the only question is what enters the base.
| Item | RM | Reasoning |
|---|---|---|
| Savings | 210,000 | Cash is zakatable at full value |
| Compliant equities | 422,400 | Market value (480,000 - 57,600) |
| Breached stock | 57,600 | Still owned at the anniversary, so still wealth; divestment and purification are handled separately |
| Gold | 57,600 | 180 g x 320, investment gold, not worn jewellery |
| Receivables | 65,000 | Only the amount he expects to recover (90,000 - 25,000) |
| Inventory | 45,000 | At cost, being the conservative valuation |
| Gross zakatable wealth | 857,600 | |
| Murabaha instalments due in 12 months | (37,200) | 3,100 x 12 |
| Car loan, 12 of 18 months | (13,800) | 1,150 x 12 |
| Net base | 806,600 | |
| Zakat at 2.5% | 20,165 |
The murabaha is deducted at RM 37,200, not RM 620,000, and certainly not RM 140,000 (the profit element): deducting the whole sale price would let him escape zakat for 20 years on an asset he is still using. The RM 480,000 unearned profit is not a liability at all; it is the bank's future income.
The RM 150,000 inheritance is excluded. It is new wealth whose own haul began on receipt and has only run three months; it enters the base at next year's anniversary. Do not let him include it now and then also claim it is 'already paid' next year.
Two defensible departures: (i) a stricter view deducts only debts actually due and payable now, which would add back the 12-month instalments and raise zakat to about RM 23,020; (ii) the doubtful RM 25,000 receivable could be included and zakat paid on it, then treated as a credit when recovered. Whichever is chosen must be applied consistently year to year and disclosed to the client.
2. Farid asks whether the RM 2,300 dividend and the 6.2% impurity can be 'netted off' his zakat. Quantify the purification and explain its relationship to zakat.
Read the worked answer
They are two separate obligations and must not be netted.
Purification: 6.2% x RM 2,300 = RM 142.60. This is the income attributable to interest, and it is owed to charity because he received it through an impermissible channel. It is not a deductible liability in the zakat computation. Deducting it would reduce zakat by about RM 3.57 while he still owes the RM 142.60, so nothing is gained and the base becomes understated.
Zakat: the stock remains in the base at RM 57,600 because he owned it at the anniversary. Zakat is a levy on wealth; purification is a cleansing of income. The zakat itself is due regardless of whether the holding is compliant.
Destination: the RM 142.60 goes to the poor or needy as sadaqah, not into the zakat purse, so it cannot be added to the RM 20,165 or paid to the madrasah as part of the zakat. If he sells the stock at a profit after the breach, the capital gain is not normally purified; only the impure income received is. Record both payments separately in the file, with the ratio and the date of the Shariah ruling that triggered the reclassification.
3. He wants to pay the RM 20,165 in Ramadan, ahead of the Syawal due date, and to add an extra amount 'against next year'. He also wants the whole sum to reach his cousin's madrasah. Advise him.
Read the worked answer
Early payment: advancing zakat within the same year, once the wealth and the nisab exist, is accepted by the majority of jurists and is administratively sensible. The amount must be computed on the wealth as it stands at the time of payment. What is not acceptable is 'paying next year's zakat' as a fixed sum now to avoid a larger liability later; that is not ta'jil, it is an attempt to fix a base that has not yet come into existence. Say plainly that zakat on next year's wealth will be recomputed at the next anniversary.
Paying the madrasah: zakat must vest in an eligible recipient (tamlik). A school can act as an agent collecting zakat for distribution to eligible students and teachers, but zakat cannot fund buildings, equipment or the salaries of staff who are not themselves eligible. Ask for the madrasah's distribution policy in writing and, if in doubt, pay the eligible individuals directly.
Paying through the cousin: valid and meritorious if the cousin is poor or needy and is not a person Farid is already legally obliged to maintain. Zakat paid to a relative he is obliged to support (parents, children, wife) is invalid because it would merely replace his own maintenance obligation. Confirm the cousin's status and which asnaf category applies before instructing the transfer.