Shares bought to sell and shares kept for income, funds and partnerships: what counts, how to value them on your zakat date, and how they enter the calculation.
Shares and funds are newer forms of wealth, and no hadith names them. Scholars apply to them the rules of trade goods (al-Baqarah 2:267) and of wealth on which a year has passed (Abu Dawud 1573), and they differ on how to value shares kept for income. What follows is in our own words.
Shares you bought to sell If you bought shares to sell them at a profit, they are trade goods: count their full market value on your zakat date.
Shares you keep for income If you keep shares for their dividends, scholars differ:
- Many contemporary scholars, among them Hanafi scholars, count only your part of the company's zakatable assets: its cash, the money owed to it and its stock, not its buildings and machines. If you cannot work this out from the company's accounts, count the full market value, which is the safer choice.
- Other scholars count the full market value of the shares in every case.
Other investments
- Units of a mutual fund are valued like shares, at their price on your zakat date.
- Money you have put into a partnership or someone's business counts as your share of that business's stock, cash and money owed to it.
- Dividends and profits you have received are cash; count them with your cash.
In the calculation Enter the value of your shares, funds and partnerships under Business stock, and the dividends you hold under Cash and bank.
If you are unsure about your own situation, ask a trusted local alim.
Source
- Surah Al-Baqarah, ayah 267
- Sunan Abi Dawud 1573
- Zakat: who pays and how