Answered by Mufti Yusuf Mullan
Is zakat applicable on money received as a gift? If I have received $20,000 as a gift (which I haven’t used so far) should I pay zakat on this amount, or is zakat applicable only on personal earnings?
Wa alaikum salaam,
Yes, zakat will be due on this amount.
Zakat is payable on whatever you “own” from the following:
1) all cash
2) gold
3) silver
4) and merchandise bought with the intention to sell.
The method by which these things came in your ownership is not relevant. As such, money received in the form of a gift is also zakat-payable.
“Also I expect to spend this amount very soon on my studies. By the time I spend the money, I reckon it will have been less than a year since I received the gift, should I wait until I have kept any residual amount for a full-year before paying zakat?”
No, you should not wait for a whole year to pass upon this money you received. Rather, you should have a set date every year in which you calculate your zakat. When that date arrives, you should add up all your zakat-payable assets, and then subtract from it all of your debts. Whatever remains, pay zakat on behalf of it at the rate of 2.5%.
The date comes into effect exactly one lunar year from the day in which you first became possessor of the minimum zakat-payable amount nisab’ (612.36g silver or its monetary equivalent in cash, gold, or merchandise bought with the intention to sell). For instance, if your routine has always been to offer zakat on the first of Ramadan, then along-side your other zakat-payable assets, this $20,000 you recently received will also be included among your zakat-payable assets. You will need to pay 2.5% on behalf of the newly acquired wealth also.
If before receiving this gift, you never possessed the minimum amount mentioned above (612.36g silver or its monetary equivalent), then it will be one lunar year from the day you received the above, that zakat will be payable on you.
And Allah knows best.