Profit from earning

1761. If a person earns by means of trade, industry or any other ways of earning, like, if he earns some money by offering prayers and fasting on behalf of a dead person, and if it exceeds the annual expenses for maintaining himself and his family, he should pay Khums (i.e. 1/5) from the surplus, in accordance with the rules which will be explained later.

1762. If a person acquires wealth without having worked for it , like, if someone gives him a gift, and that wealth exceeds his own annual expenses, he should pay Khums from the excess.

1763. There is no Khums liability on Mahr which a wife receives, nor on the property, which a husband gets in exchange of divorcing his wife by way of Khula , and the same rule applies to the property which one inherits according to the genuine laws of inheritance.
If a Shia Muslim inherits from a source which is not accepted in our Fiqh, like inheriting from a distant relative despite his heirs being present (Ta'seeb), it will be considered a gain, and Khums will have to paid from it.
Similarly, if a person inherits from an unexpected source, neither from his father nor from his son, then as an obligatory precaution, he will pay Khums from that inheritance if it exceeds his annual expenses.

1764. If a person inherits some property and knows that the person from whom he has inherited did not pay Khums from it, he (the heir) should pay its Khums.
And if that property is itself not liable for Khums, but the heir knows that the person from who he has inherited, owed some Khums, he should pay it from the deceased's estate. But in both the cases, if the person from whom he inherits did not believe in Khums, or never paid it, then it is not necessary for the heir to pay off the Khums owed by the dead.

1765. If a person saves from the annual expenses because of economising and frugality, he should pay the Khums.

1766. If the expenses of a person are borne by somebody else, that person should pay Khums on his entire earning.

1767. If a person gives away a property as Waqf to some individuals, like his sons, and if they do farming and planting trees on that property, and acquire from it an earning which exceeds their annual expenses, they should pay its Khums.
Similarly, if they profit from that property in some other manner, like if they lease it out, they should pay Khums from the amount which exceeds their annual expenses.

1768. If the wealth received by a poor man, by way of obligatory or recommended Sadaqah, exceeds his annual expenses, or if he earns profit from the property given to him, like, if he gets fruit from a tree which has been given to him, and that exceeds his annual expenses, he should pay Khums from it. But wealth which he has received as Khums or Zakaat is not liable for any Khums.

1769. If a person purchases a commodity with the money on which the Khums has not been paid, that is, if he says to the Shia Ithna Asheri seller: "I am purchasing this commodity with this money," the transaction will be in order in respect of the entire property, and Khums will apply to the commodity which he has purchased with that money. And no permission and acknowledgement of a Mujtahid will be necessary.

1770. If a person purchases a commodity, and after the transaction, pays its price from the money from which Khums has not been paid by him, the transaction will be in order, but he will be indebted to those who deserve to receive Khums, for the sum he has paid to the seller.

1771. If a Shia Ithna Asheri person purchases something on which Khums has not been paid, the Khums will be the liability of the seller, and the buyer is not responsible for anything.

1772. If a person gives a gift to a Shia Ithna Asheri, from which Khums has not been paid, one fifth of it is the liability of the donor himself, and one who gets the gift is not required to pay anything.

1773. If a person acquires wealth from an unbeliever, or a person who does not believe in paying Khums, it will not be obligatory for him, that is, the person who receives, to pay Khums.

1774. It is obligatory on the merchants, the earners, the artisans, and others like them that when a year passes since they started earning, they should pay Khums from whatever is in excess of their expenses for one year.
And if a person who is not earning, makes an unexpected gain, he should pay Khums after a year has passed since he gained, on the savings which exceeds his expenditure for that year.

1775. A person can pay Khums as and when he earns a profit during a year, and it is also permissible to delay payment of Khums till the end of the year. And there is no objection if one adopts the solar year for the payment of Khums.

1776. If a merchant or an earner fixes a year for payment of Khums, and makes a profit, but dies during the same year, his expenses till his death should be deducted from the profit, and Khums should be paid on the balance.

1777. If the price of a commodity one purchases for the purpose of business shoots up, and he does not sell it, and its price falls during the year, it is not obligatory on him to calculate Khums on the increased prices.

1778. If the price of a commodity which a person purchases for the purpose of business shoots up, and he does not sell it till after the end of the year, expecting that the price will rise, and then the price falls, it is obligatory for him to calculate Khums based on the increase in the price.

1779. If a person possesses some goods other than merchandise, from which Khums has been paid by him, if its price shoots up, and he sells it, he will pay Khums on the excess gained.
Similarly if, the tree which he has purchased bears fruit, or a sheep which becomes fat , and if his object in maintaining them was to earn profit, he should pay Khums from the price increase. In fact, even if it was not his object to earn profit, he should pay Khums on them.

1780. If a person establishes a garden, with the intention of selling it after its price goes up, he should pay Khums on the fruit, the growth of the trees and the increase in the price of the garden. But, if his intention is to sell the fruit of the trees and benefit from its value, he should pay Khums on the fruit only.

1781. If a person plants willow, plane tree and other trees like them, he should pay Khums on their growth every year. And similarly, if he makes profit from the branches of the trees which are cut every year, and the price of these branches alone, or the same added with other profits made by him, makes his income exceed his expenditure for the year, he should pay his Khums at the end of each year.

1782. If a person has a few sources of income, for example, he receives rent for his property and is also engaged in trade, if they are all considered as one business, he should pay Khums at the end of the year from what exceeds his expenses. And if he makes a profit in one source and sustains loss in another, he can offset his loss of one with the profit of the other.
But if he has two different businesses, like, if he is engaged in trade as well as farming, he cannot, as an obligatory precaution, offset the loss in one with the profit made from the other.

1783. A person can deduct from his profit, the expenditure which he incurs in making profit, like, on brokerage and transportation, and it is not necessary to pay Khums on that amount.

1784. No Khums is payable on what one spends from his profit during the year on food, dress, furniture, purchase of house, marriage of son, dowry of daughter, Ziyarat etc., provided that it is not beyond his status, and he has not been extravagant.

1785. Whatever a person spends on Nadhr and Kaffarah is a part of his annual expenditure. Similarly,what he gives away as a gift or a prize is included in his annual expenditure, provided it is not beyond his status.

1786. If a person cannot prepare all the dowry for his daughter at the time of her marriage, and has to do so over a few years, and if it is deemed unbecoming for him not to give away any dowry, Khums will not be liable on what he purchases during the year, provided it is within his means. But if he exceeds his means, or spends the profit of one year to buy the dowry in the following year, he will pay its Khums.

1787. Whatever a person spends for his journey to Hajj and other Ziyarats (pilgrimages) is reckoned to be part of his expenditure of the year in which he spends it, and if his journey extends till part of the next year, he should pay Khums on what he spends during the second year.

1788. If a person who earns profit from his work and trade, has some other property on which Khums is not liable, he can calculate his expenditure for the year from the profit earned from his work or business.

1789. If a person purchases provision for his use during the year, with the profit made by him, and at the end of the year a part of it remains unused, he should pay Khums on it. And if he wants to pay its value, which may have increased since he brought the provision, he should calculate the price prevailing at the end of the year.

1790. If a person purchases household accessories with the profit earned by him before paying Khums, it is not necessary for him to pay Khums on them if their need ends after the year ends.
There will no liability of Khums if their needs cease to exist during the year, but they must be those articles which are kept for many years, like the winter and summer dresses. Other than these, Khums will be, as an obligatory precaution, liable as soon as their need is over. Similarly, when a woman no more needs her ornaments for adornment, Khums will have to be paid on it.

1791. If a person does not make any profit during a year, he cannot deduct his expenditure of that year from the profit which he makes in the next year.

1792. If a person does not make any profit in the beginning of the year, and spends his capital, and then makes some profit before the year ends, he is allowed to deduct the amount spent from his capital, from the profit.

1793. If a part of the capital is lost in trade etc., a person can deduct the lost amount from the profit made in the same year.

1794. If something else other than capital is lost from his wealth, he cannot procure it from the profit made by him. But if he needs that thing during that very year, he can procure it from the profit.

1795. If a person does not make any profit throughout a year, and borrows money to meet his expenses, he cannot deduct the borrowed amount from the profit made by him during the succeeding years. But, if he borrows money in the beginning of the year to meet his expenses, and makes profit before the year ends, he can deduct the borrowed amount from his profit.
Similarly, in the first case mentioned above, he can deduct his debt from the profit made during the year, and that part of the profit will not be liable for Khums.

1796. If a person takes a loan to increase his wealth, or to purchase a property which he does not need, he cannot repay that loan from the profit earned during that year. However, if the loan taken out by him, or the thing purchased with it, is lost, he can pay the loan out of the profit made by him during that year.

1797. A person can pay the Khums of the thing from itself, or he can also pay money equivalent to the value of the Khums for which he is liable. But if he wants to pay from another commodity which has not yet become liable for Khums, he cannot do so without the permission of Mujtahid.

1798. If a person becomes liable for Khums and he has not paid it although a year has passed, and also does not intend to pay it, he cannot have any discretion over that property. In fact, as an obligatory precaution, the position is the same (i.e. he cannot have any discretion over the property) even if he intends to pay Khums.

1799. A person who owes Khums cannot take responsibility for it, i.e. treat himself to be the debtor of those entitled to receive it, and use the entire property, and if he uses that property and it is lost, he should pay Khums on it.

1800. If a person who owes Khums makes a compromise with the Mujtahid, and takes responsibility for it, he can appropriate the entire property, and the profit he earns from it after the compromise, belongs to him.

1801. If one partner pays Khums on the profit made by him, and the other partner does not pay it, and he (the other partner) offers in the next year, as share of his capital, the property on which Khums has not been paid by him, the first partner who has paid Khums can have the right of disposal over that property, if the other fellow is a Shia Ithna Asheri Muslim.

1802. If a minor child owns some capital, and profit accrues on it, Khums becomes liable and it is obligatory upon his guardian to pay the Khums. But if he does not, the minor child will have to pay it when he attains puberty.

1803. If a person acquires wealth from another person, and doubts whether or not he has paid Khums on it, he has a discretion over it. In fact, even if he is certain that the other person has not paid Khums on it, he has the discretion over it if that person is a Shia Ithna Asheri.

1804. If a person purchases with the profit earned by him, a property which is not supposed to be part of his needs and annual expenses, it is obligatory on him to pay Khums on it at the end of the year. And if he does not pay Khums, and the value of the property increases, he should pay Khums on its current value. And besides property, the same rules apply to carpets etc.

1805. If a person who has never paid Khums since he became liable, purchases a property, and its price goes up, and if he had not purchased it with the intention to see its price inflated and sell - for example, if he had purchased a land for farming and paid its price out of the money on which he had not paid Khums, he should pay Khums on the purchase price.
And if, he has paid to the seller the money on which Khums has not been paid by him, and told him: "I am purchasing this property with this money" he should pay Khums on the current value of that property.

1806. If a person who has never paid Khums since he became liable for it, purchases with the profit of his trade, something which is not needed by him, and a year passes since he made that profit, he should pay Khums on that thing. And if he purchases household equipment and other necessities, in accordance with his status, it is not necessary for him to pay Khums on them, if he knows that he purchased them during the year with the same year's profit. And if he does not know, he should, as an obligatory precaution, make compromise with the Mujtahid.