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Video: Zakat on cash & liquid investments - Imam Abid Khan
These are investments you have immediate access to for example, cash in your bank accounts, wallet and even the stash of cash you have in your money box for that rainy day! Yep, even the few pounds hiding deep in the pocket of your jeans counts too!
What counts as a cash and liquid assets?
We are not going to cover rulings relating to livestock and agriculture in these pages as the number of people dealing with these assets are limited. If you have a specific enquiry regarding livestock, feel free to contact firstname.lastname@example.org or use our ‘Zakat Callback Service’ below. As Zakat is an individual payment we understand that all situations are different - we’re always here to help and are more than happy to answer your queries.
Zakat is binding on the amount of one’s savings in the form of salaries on one’s annual Zakat day. Regardless of how much salary one received in the year, only the remainder on the Zakat anniversary will be considered and be subject to Zakat. Salary spent throughout the year will not be subject to Zakat.
Other types of income such as benefits (that make up part of the welfare system in the UK) are still classed as income. On your Zakat anniversary, any money that you have with you should be included in your cash balance for Zakat purposes, irrespective of whether it came from salary, benefits, rental income etc. You need to determine whether this income takes you over the Nisab threshold and if so you will need to pay Zakat on this amount. Though some may think that benefits do not equate to Zakatable income – this is most definitely not the case.
If interest has been earned on your liquid investments and assets, then it should ALL be given away to charity. Interest is unlawful in Islam and therefore giving this as charity would not bring the reward that usually accompanies this good deed as we need to understand that the interest we have got on our money is NOT actually ours.