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Saturday, September 19, 2009

Zakaat on Money in a Bank

Q: How should I calculate Zakaat for cash in a bank? I was told the money has to be in teh bank for 12 months. What if I had R100.000 and I deposit and withdraw from last Ramadaan till now? On which amount do I calculate the Zakaat?

A: A rule to remember for zakaat is that once 12 Islamic months have passed over the money then whatever is in the bank or in savings at the point, is taxable with zakaat, regardless of whether you used from it or added to it during the course of the year. It is not necessary that you have the same amount of money at the end of the year as you had at the start of the year. So if for example you had 10,000 in the bank account at the start of the year, and during the course of the year you withdrew money from that account or deposited more money; you shall have to pay zakaat on whatever is left in that account, whether it is more or less than the original amount of 10,000.

Mufti Siraj Desai