Answered by Sidi Suheil Laher
i started business with various types of merchandise worth 1000000. In one year I earned profit 200000 so the merchandise value became 1200000? on what amount i have to pay zakat?
Answer:
wa`alaykum as-salam wa-rahmatullah
1. There are various ahadith and athar (sayings of the Sahabah and Tabi`in) affirming zakat on trade-goods (i.e. merchandise, including raw materials, if applicable), and Imam Ibn al-Mundhir has cited scholarly consensus on its obligation.
2. Note that machinery, land, fixtures and fittings that are used in your business are exempt fom zakat.
(See also: Imam al-Quduri’s regulations according to the Hanafi school:
http://webpages.marshall.edu/~laher1/quduri/zakatQ.html#4)
3. In your case, therefore, you should pay zakat on the value of the merchandise at the end of the lunar year, i.e. 2.5% of 1200000 = 30000.
And Allah knows best.
-sl
-sl