My Question is regarding zakat on dividend and shares, I’ve been investing in Zakat for last 4 years with the intention of keep on purchasing shares to receive divdend in my retirement, I came across different Ulma’s online with different views regarding zakat on dividend. My Question is:
Based on my intention, to hold my stocks forever, do I need to pay zakat on my stock portfolio value.
OR
Do I pay zakat only on my dividends(which some online Ulma say’s 10% of dividend income).
OR
Follow the formula based on Meezan Bank Pakistan for share holders(intention to keep stock forever) which is Total Asset – Fixed Asset – Liabilities/ Number of Shares x 2.5/100 (based on this formula the zakat comes much lower then what am I paying)
Will really appreciate your answer in detail related to my situation.
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
You may follow the formula as outlined by Meezan Bank Pakistan.[1] However, if the calculation becomes difficult, then you may consider paying Zakāh on the entire value of one’s stock portfolio.[2]
And Allah Ta’āla Knows Best
Bilal Mohammad
Student Darul Iftaa
New Jersey, USA
Checked and Approved by,
Mufti Ebrahim Desai.
[1] Islam Aur Jadeed Ma`āshī Masāil, v. 3 p. 27, Idarah-e-Islāmiyyāt;
Guide to Zakah: Understanding and Calculation, p. 19, Maktabah Ma`āriful Qur’ān
[2] Ibid.;
Islam Aur Jadeed Ma`īshat aur Tijārat, p. 93, Maktabah Ma`āriful Qur’ān