Subscribe

Entitlement of Pension, Zakat on Share Investment and House Property

A widow is getting 30,000 a month as pension from the organisation her deceased husband was working in. Is it her sole income or has she to distribute it among her sons and daughters, the inheritors of her husband’s properties, as inheritance?

Written by

DR. WAQUARANWAR

Published on

QUESTIONS

  1. A widow is getting 30,000 a month as pension from the organisation her deceased husband was working in. Is it her sole income or has she to distribute it among her sons and daughters, the inheritors of her husband’s properties, as inheritance?
  2. How to compute Zakat on investments in shares? Will it be on purchase price of stock or on profit on investment or the market price prevailing at the time of computation of Zakat?
  3. A person has many flats in the city. He lives in one flat and has rented other accommodations, earning rent therefrom. How to compute Zakat – on rent earned or on the cost of acquiring those flats or the market price at the time of the computation?

– Farooq Azam, Kolkata

ANSWERS

PENSION: We approached Dr. Raziul Islam Nadvi, who replied that the pension amount is the sole income of the widow and she need not share it with the inheritors of her deceased husband, including her sons and daughters. This ruling is based on the reasoning that the pension amount is in the nature of social security and gift meant exclusively for the widow and it would cease with her death.

ZAKAT ON INVESTMENT IN SHARES: Zakat is due only after a person possesses continuously for 12 months of Islamic calendar wealth in the form of a particular level of gold or silver or their cash equivalent. The day he becomes liable for payment of Zakat shall be the date for all his future computations of Zakat. After that, requirement of possessing something for 12 months is not relevant. His Zakat will be based every consequent year on the position of wealth on the date he first became liable.

The wealth on which Zakat is calculated is also defined. It includes cash in hand, bank balance, gold, silver and investments in the form of shares. Investment in shares is considered a liquid asset like cash. Zakat will be calculated on the market price of such investment on the date of computation. Purchase price or profit or loss on investment has no relevance for the purpose.

ZAKAT ON HOUSE PROPERTY: Zakat is due on specified assets. Generally, there is no Zakat on house property. However, if a person deals in purchase and sale of house properties, including land and flats then these are his commercial goods and Zakat would be payable on their closing stocks. So, in the case that you have enquired, there is no Zakat on the flats he owns. On the date of computation Zakat will be calculated based on his liquid asset, including cash and bank balances. There is no Zakat on income as such, be it on account or rent or from any other source. Zakat is on saving, and not on income. Zakat for a person will be payable on the unutilised liquid asset on the date of computation.