Some modern issues of Zakaat

Zakaat on Provident Fund   In government and the private sector, a certain percentage from the salary of the employee is set aside and at the end of the service tenure or on the death of the employee, then the company adds its own sum to this amount and it is given to the employee or the employee’s heirs.  Is Zakaat Compulsory on the amount collected from the employee and on the extra amount given by the company?           In this situation, there are 2 opinions of the scholars.  Some say that the amount deducted from the salaries of the employees is not within their power.  As such there is no Zakaat on it.           Other scholars say that Zakaat is Compulsory on it as the employees are the owners of that amount.  As the amount is not yet in their possession, the payment of Zakaat is not binding on them yet.  When they get that amount, then along with other forms of wealth, if it meets the prescribed criterion and a year passes on it, Zakaat is Compulsory on it.  The second opinion is the more cautious one.  Similarly, when the amount from the company is received, Zakaat will become Compulsory on it as well.   Zakaat on fixed deposit   It is obvious that Zakaat has to be given on the money deposited in the bank as the account-holder can withdraw the amount as and when he/she wants.  As far as Zakaat on fixed deposit is concerned, then like provident fund, there are 2 opinions of the scholars on this.  Some scholars hold the opinion that Zakaat is not Compulsory on it and some hold Zakaat to be Compulsory on it.  The second opinion is the more cautious one.  Thus, along with other forms of wealth, when it meets the prescribed criterion and a year passes on it, Zakaat of fixed deposit should be given.   Zakaat on gratuity   Gratuity is given after one’s tenure ends.  Before receiving the amount, there is no Zakaat on it, as nothing is being deducted from your salary for this.  When one gets the amount, then if that amount meets the prescribed criterion of Zakaat, which is 60 grams 755 milligrams of gold or 425 grams 285 milligrams of silver or its equivalent wealth in any form and 1 year passes on it, then Zakaat becomes Obligatory on that amount.   Zakaat on insurance amount   Premiums are given to insurance companies under various policies.  Regardless of which policies are permissible as per the Shariah and which are not, here the ruling of the Zakaat of that collected amount is being described.   There are 2 opinions of the scholars about the amount collected under insurance policies.  Some scholars opine that Zakaat is not Compulsory on that amount as it is not in our possession and some opine that Zakaat is Compulsory on it.  Their deduction is that the policy-holders are the owners of that amount.  The second opinion is the more judicious one.  Thus, Zakaat should be given on the amount of insurance.   However, the amount that will be given by the insurance company, as it has been given, Zakaat is not Compulsory on it.   And Allah (Subhanahu Wa Ta’ala) knows best.   Mufti Syed Ziauddin Naqshbandi Qadri,   [Professor, Islamic Law, Jamia Nizamia, Founder-Director, Abul Hasanaat Islamic Research Center]

Dr. Mufti Syed Ziauddin Naqshbandi Mujaddidi Qadri

Shaykh Ul Fiqh, Jamia Nizamia; Founder - Director

Mufti Maulana Syed Zia Uddin Naqshbandi Quadri

Shaik-ul-Fiqh - Jamia Nizamia

Scholarly Articles

Some modern issues of Zakaat