Paying Zakah on stocks

15-11-1999 | IslamWeb

Question:

I trade in stocks. Please let me know how does one work out the Zakat for stocks?

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Answer:

Praise be to Allah, the Lord of the Worlds; and blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.

The Zakah should be given on shares just as it is given on articles of trade. First, you should know their value and give out a quarter of the tenth of that value that is 2.5%. On the other hand, buying and selling the shares daily or over short periods of time is lawful if the shares are of something that could be traded with in Islam and if the buying and selling are themselves subjected to Shari‘a rules. Allah knows best.