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Zakat on business goods

Goods earned by commutative contracts, and set aside for investment in business or profit earning, is, as a precaution, liable for Zakat if certain conditions are fulfilled. The rate of Zakat is 1/40.

(i) The owner of the goods should be baligh and sane.

(ii) The goods should have reached the taxable limit, which is equal to that of gold and silver.

(iii) The goods should have remained for one year ever since the owner intented to invest it for profit.

(iv) The intention of investing it for profit should have remained unchanged throughout the year. If the intention changes, like, when he decides to spend it for maintenance, then he will not pay its Zakat.

(v) The owner should be actually capable of its disposal throughout the year.

(vi) Throughout the year, the owner should have a buyer of the goods equal to the capital or more. If, during the year, he gets a buyer for the goods for less then capital outlay, it will not be obligatory upon him to pay its Zakat.