Application of Zakat on company equity

Answered according to Hanafi Fiqh by DarulIftaBirmingham

Answered by: Maulana Muddasser Dhedhy​


Assalamu Alaikum Wa Rahmatullah

My question is regarding the zakat on equity.

I had received preferential equity shares from my former employer. It was issued as a free gift in the year 2011.

The company got listed on the stock market in March 2017. The lock-in period allotted by the company for selling the shares was unlocked on 23rd March 2018. Hence I was able to sell part qty of it for buying a house.


Around 40% of the equity is lying in the Demat form which I intend to keep for the long term.

My question is on the applicability of Zakat on it. During the locking period, no transaction was allowed with equity. It’s only after the locking period got ended (23rd March 2018), I was able to sell it. In that case, I have not completed a lunar calendar cycle.

Please guide me over the applicability of Zakah on it; should you require additional information please let me know.


بسم الله الرحمن الرحيم

In the name of Allah, the Most Gracious, the Most Merciful.

Firstly, it is permissible for an employee of a company or business to accept and utilize equity shares given as a gift. The company’s rewards will only become the owner of the employee after the lock-in period has elapsed and they are able to conduct transactions in the shares.[1]

Hence, if the lock-in period ended on the 23rd of March 2018, it is from this date that you will start your lunar Zakat year.

It is unclear from your question what the state of the shares was from the time they were allocated to you in 2011 to the time when the company was listed on the stock market in 2017. Was this time (2011-2017) part of the lock-in the period also?  

Only Allah Ta’ala knows best.

Answered by Maulana Muddasser Dhedhy

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham


[1] وَمِنْهَا الْمِلْكُ التَّامُّ وَهُوَ مَا اجْتَمَعَ فِيهِ الْمِلْكُ وَالْيَدُ وَأَمَّا إذَا وُجِدَ الْمِلْكُ دُونَ الْيَدِ كَالصَّدَاقِ قَبْلَ الْقَبْضِ أَوْ وُجِدَ الْيَدُ دُونَ الْمِلْكِ كَمِلْكِ الْمُكَاتَبِ وَالْمَدْيُونِ لَا تَجِبُ فِيهِ الزَّكَاةُ كَذَا فِي السِّرَاجِ الْوَهَّاجِ)الفتاوى الهندية ج 1 ص 189-190. دار الكتب العلمية)

اب كى مسائل اور ان كا حل ج 11 ص 182. مكتبة لدهيانوى

جديد فقهي مسائل ج 2 ص 46-47. زم زم ببلشرز



This answer was collected from, which is run under the supervision of Mufti Mohammed Tosir Miah from the United Kingdom.

Find more answers indexed from: DarulIftaBirmingham
Read more answers with similar topics:
Subscribe to IslamQA Weekly Newsletter

Subscribe to IslamQA Weekly Newsletter

You will receive 5 Q&A in your inbox every week

We have sent a confirmation to you. Please check the and confirm your subscription. Thank you!