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DOES A PERSON HAVE TO PAY ZAKAAT ON HIS PERSONAL VEHICLE?

Answered according to Hanafi Fiqh by DarulUloomTT.net

QUESTION

As Salaamu Alaikum,

I have a question on Zakaat.If I have a vehicle and I tell someone to work it for me for a specified time and at a specific amount for the week (eg. 2 years) and then it will belong to him,how do I go about calculating zakaat?And also if I have another car that I sold but the person is paying me on a monthly basis,how do I calculate zakaat on this as well? Jazakallah khair.

ANSWER

Wa Alaikum As Salaam,

  1. In the first case, Zakaat is not upon the vehicle since it is not an item of sale. It is your personal vehicle which someone is working for you to bring an income. During the period of receiving an income from the vehicle, if the monies were added to your savings, then at the time of paying Zakaat, you will pay on the total amount which includes the monies achieved from the vehicle.

With respect to the statement that ‘it (the vehicle) will belong to him’ (after the specified time), then this will be considered as if you are giving the vehicle to him as a gift (after he has worked it for you for a period of time). This will not be considered a sale of the vehicle. If you wish to sell it to him, then you will have to enter a new transaction of sale and put a price for the vehicle (even though it may be a small amount), and then offer it to him to purchase from you. It must be understood that this transaction of the sale of the vehicle in this manner will be an entirely new transaction, and must have no connection to the prior arrangement you had with the person. Your first arrangement with the person was that of ‘hire’, where you hired him to work the vehicle for you. At that time, you were the full owner of the vehicle and he was simply a worker. That was not a transaction of sale.

After the term of ‘the hire’ comes to an end, you will still be the owner of the vehicle, since there was no other transaction you had with the person except that of ‘hire’.

Now, if you want the person to become the owner of the vehicle, you will either have to sell it to him by initiating a new transaction or by giving it to him as a gift.

  1. In the second case, if you are using the money that comes to you on a monthly basis, then you would not pay Zakaat on it since it is being used continuously for your needs etc. If you are accumulating it and adding it to your savings, then when you are ready to pay Zakaat, you will pay on the total sum of your savings (which will also include the monies received from the sale of the vehicle).

And Allah Knows best

Mufti Waseem Khan

21/09/2018

This answer was collected from DarulUloomTT.net, which is operated under the supervision of Mufti Waseem Khan from Darul Uloom Trinidad and Tobago.

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