Zakaat Calculation

Question ID: 20530

Assalaamu-alaikum Mufti

I have a question regarding zakaat. When calculating my zakaat, I have done the following:
1. Calculate all cash / funds in hand (cash, accounts etc.)
2. Calculate the value of all gold and silver at current market price
3. Calculate the total of all insurance premiums I have paid in the year
4. Calculate the annual voluntary investment / annuities I paid in the year

This gave me the total amount I need to pay zakaat on. I know need to subtract any debts I have. I have a home and car loan. Do I subtract the full amounts owing or just what I needed to pay in that year?

Example: Lets say the total cash in my possession (points 1 to 4) is R 500 000 and my debt outstanding is R 900 000. If I subtract the entire amount, I will be negative i.e. – R 400 000 and then no zakaat is paid. This does not seem right, so lets say my installments for the year on the R 900 000 is R 300 000. Do I then subtract that (R 500 000 – R 300 000 = R 200 000) and my zakaat due is on the R 200 000, which will be R 5 000?

Jazakallah in advance

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Asked on June 26, 2016 8:14 am
Private answer

1 and 2 are your assets, pay 2 and half % on that.
The rest are liabilities which instalments for the past year you have already paid for.

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Answered on June 27, 2016 1:21 pm