Zakah on Banknotes and bonds

Friday, September 20, 2019

Since they are documents with guaranteed credits, banknotes and bonds are subject to zakah once they attain the minimum of nisab--that is, a person may change them into currency immediately. The minimum of nisab is twenty-seven Egyptian riyals.

Zakah on Jewelry 

Scholars agree that no zakah has to be paid on diamonds, pearls, sapphires, rubies, corals, chrysolite, or any kind of precious stones unless they are used for trade. There is, however, disagreement over whether women’s gold or silver jewelry is exempt. Abu Hanifah and Ibn Hazm hold that zakah is compulsory on gold and silver jewelry provided they constitute a nisab. Their view is based on the report of ‘Amr ibn Shu’aib from his father from his grandfather: “Two women with gold bracelets on their wrists came to the Prophet, (SAW). The Prophet said: ‘Do you want Allah to make you wear bracelets of fire on the Day of Judgment?’ They answered: ‘No.’ He said: ‘Then pay the zakah which is due on what you wear on your wrists.’ “

In the same way, Asma’ bint Yazid reported: “My aunt and I, while wearing gold bracelets went to the Prophet, upon whom be peace. He asked: ‘Did you pay their zakah?’ She related that they had not. The Prophet said: ‘Do you not fear that Allah will make you wear a bracelet of fire? Pay its zakah.’ “Al-Haythami confirms that it was narrated by Ahmad, and its chain is good.

‘Aishah narrated: “The Messenger of Allah, (SAW), came to me and saw me wearing silver rings. Thereupon, he asked: ‘What is this, ‘Aishah?’ I replied: ‘I made them to adorn myself for you, O Messenger of Allah.’ He said: ‘Did you pay their zakah?’ I said: ‘No, or what Allah wishes.’ Then he said: ‘Their punishment in Hell is enough for you.’ “This is related by Abu Dawud, ad-Daraqutni, and al-Baihaqi.

Malik, ash-Shaf’i, and Ahmad ibn Hanbal hold that there is no zakah on women’s jewelry regardless of its value. Al-Baihaqi relates that Jabir ibn ‘Abdullah was once asked if jewelry was subject to zakah. He replied that it was not, even if its value exceeded one thousand dinars.

Al-Baihaqi also narrates the case of Asma’: “Asma’ bint Abu Bakr used to adorn her daughters with gold. Although its value was around fifty thousand dinars, she did not pay zakah on it.”

It is related in al-Muwatta’ from ‘Abdurrahman ibn al-Qasim from his father that ‘Aishah used to take care of her nieces, who were orphans under her protection, and adorned them with jewelry without paying its zakah. Also in al-Muwatta’ it is related that ‘Abdullah ibn ‘Umar used to adorn his daughters and slave girls with gold without paying zakah.

Summing up the subject, al-Khattabi concludes: “What appears in the Qur’an supports the view of those who hold that zakah is obligatory on gold and silver, and the traditions also support this. Those who did not consider it obligatory based their view on speculation and some of the traditions. However, to be on the safe side, it is better to pay.” These different views deal with allowable gold or silver adornment. As for other adornments which are prohibited-- that is, a woman wearing a man’s adornment--their zakah should be paid. The same rule is applied to gold or silver utensils.

Zakah on a Woman’s Dowry 

Abu Hanifah is of the opinion that there is no zakah on the dowry of a woman until she comes to possess it. At the same time, the dowry must constitute the Nisab at the end of the year. The position, however, will be different if the woman has accumulated a nisab other than the dowry. In such a case, any amount she receives should be added to the nisab, and zakah should be paid at the end of a year of possession. Ash-Shaf’i holds that a woman must pay zakah on her dowry at the end of one year, even if it is before the wedding. The probability of its restitution because of nullification, or its fifty percent refund because of divorce, does not exempt her from paying it. The Hanbaliyyah are of the opinion that dowry is a credit for women and that it is similar to debts. If the recipient of a dowry is rich, the payment of its zakah is obligatory. If the recipient is insolvent, or does not acknowledge it, then, according to al-Khiraqiyy, the zakah is obligatory regardless of the consummation of marriage. If a woman receives half of her dowry (in the case of her divorce before consummation), she should pay zakah only on the received half. However, if the entire dowry is cancelled before she receives it (in the case of nullifying the marriage on her behalf), she is under no obligation to pay its Zakah.

Zakah on House Rent 

Abu Hanifah and Malik maintain that the rent is not payable to the landlord at the time of the contract but at the expiry of the renting period. Thus, the landlord who rents out a house should pay the zakah on his house rent, provided the fixed amount meets the following conditions: receiving of the money and completion of nisab at the end of the year. The Hanbaliyyah think that once the contract is concluded, the landlord is entitled to have rent. Thus, if someone leases his house, the zakah is due upon its fixed rate reaching a nisab at the end of the year. This is so because the landlord has the right to spend the rent the way he wants to. The possibility of cancelling the lease does not invalidate the obligation to pay zakah. This case is similar to the case of dowry before the consummation of a marriage. If the rent is an arrear rent, then it should be treated as a debt either as paid or postponed. In al-Majmu’, an-Nawawi says: “If somebody leased a house and was paid in advance, he should pay its zakah on receiving it. This is uncontroversial.”

Zakah on Trade 

The majority of scholars among the companions, the followers, the generation after them, and the jurists who came subsequently held that zakah on merchandise is compulsory. Abu Dawud and a-Baihaqi relate that Samurah ibn Jundub reported: “The Prophet, upon whom be peace, used to command us to pay Sadaqah from [the goods] we had for sale.” Ad-Daraqutni and al-Baihaqi relate that Abu Zharr reported the Prophet, (SAW), saying: “There is Sadaqah on camels, sheep, cows, and house furniture.” Ash-Shaf’i, Ahmad, Abu ‘Ubaid, ad-Daraqutni, al-Baihaqi, and ‘Abd ur-Razzaq relates that Abu ‘Amr ibn Hammas reported from his father that he said: “I used to sell leather and containers. Once, ‘Umar ibn al-Khattab passed by me and said: ‘Pay the sadaqah due on your property.’ I said: ‘O Commander of the Faithful, it is just leather.’ He replied: ‘Evaluate it and then pay its due sadaqah.’

Commenting on its credentials, Ibn Quadmah says in al-Mughni that this is a kind of story which is well known and indisputable. This might be a consensus of opinion.

On the other hand, the Zahiriyyah maintain that merchandise is not subject to zakah. They differ, says Ibn Rushd, because of their use of analogical reasoning to the obligation of zakah and because of their disagreement on the authenticity of Samurah’s and Abu Zharr’s reports.

However, the majority of jurists view merchandise as a property which increases in value. Hence, by analogy, it is similar to the three categories upon which zakah must be paid: plantations, cattle, and gold and silver.

It is stated in al-Mandr: “Most scholars agree that zakah is obligatory on merchandise even though there is no clear-cut ruling in the Qur’an or the Sunnah on this issue. However, there are a number of reports that corroborate each other with regard to the evidence provided by [their] texts. Their rationale is that since merchandise is a form of cash, there is no difference between it and dinars or dirhams in terms of which it is valued. This means that the form of the nisab can alternate between value in the form of cash and that which is valued in the form of merchandise. If zakah had not been obligatory on merchandise, the rich--or most of them --would have converted their cash into merchandise for trading purposes, making sure that the nisab of gold and silver is never possessed by them for a year.”

The main consideration here is that by levying zakah on the rich, Allah the Exalted wants to help the poor and to promote the welfare of the people in general. For the rich, its benefit lies in cleansing their persons of stinginess--both in money and feelings. For the poor, its benefit lies in easing their circumstances. Zakah thus eliminates the causes of corruption which results from the increase of money in a few hands. It is this wisdom which the Qur’an refers to when it deals with the distribution of booty: “... that it becomes not a commodity between the rich among you” (al Hashr 7). Therefore, it is not reasonable to exempt businessmen from their societal obligations when they possess most of the nation’s wealth.

To be continued