Zakah on Equity.

Answered according to Hanafi Fiqh by DarulIftaBirmingham

Answered by: Moulana Tahsin Alam


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 a part quantity 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 that case, I have not completed a lunar calendar cycle. Please guide me over the applicability of Zakah on it.

بِسْمِ اللهِ الرَّحْمنِ الرَّحِيْم

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


Assalamu Alaikum Wa Rahmatullahi Wa Barakaatuh,

Zakāh is liable on assets which have been in your possession, with the intention of trade, for one lunar year. This time will begin from when you have absolute complete possession of the item[1], in your case the 23rd of March 2018.


Only Allah knows best

Written by Moulana Tahsin Alam

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham


[1]Imām al-Kāsānī, Badāiʿ al-Ṣanāiʿ (Cairo: DarulHadīth, 2005), volume 2 pg. 398.

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