Wealth Accumulated During the Year: How to Pay its Zakah?

Explaining the true position of Islam on this, Dr. Monzer Kahf, a scholar in Islamic Economics and a Financial Expert, said:

“The Prophet (peace and blessings be upon him) when sending his zakah collectors never advised them to maintain separate account for the baby camels that are not yet one year old or to make arrangement for every Dirham a trader or a business man earns on daily basis. It is simply can’t be thought of. Zakah collectors used to count what is there on the spot when they come to any Zakah payer.

We have overwhelming evidence that you count new born livestock along with the older ones. It is true that we have to maintain a hawl, that is one lunar year, whereby there will be no Zakah collection twice within 354 days. But this hawl is considered for the original amount not for the additives that cumulates over it.

Hence, the way Zakah is calculated is as follows: once you obtain a nisab, you mark the day as the beginning of your hawl. Come after 354 days and count what do you have. If it is nisab or more, you calculate the Zakah on all the amount you have on that day. This applies to cash, debts on others including banks, livestock, investment and other zakatable assets.”