Question # 306: Dear Shaikh, Jzk k for providing us such good answers always to our concerns. I have bank a/c in New Zealand, which earned interest as it was government scheme to give permanent residence back in 2002, majority of the interest earned was given away as an impermissible income few years back however now an amount remains which is fixed deposit and accumulating interest every year, I hope to get rid of it soon, Am I liable to pay Zakat on this amount as I consider this amount as not mine at all, and have not paid any Zakat on it for few years now.
Bismi-llahi r-raḥmani r-raḥīm,
Assalamu ‘laikum warahmatullahi wabarakatuh,
All praise and thanks are due to Allah (سبحانه و تعالى), and peace and blessings be upon His Messenger (صلى الله عليه و سلم).
First of all, we implore Allah (سبحانه و تعالى) to help us serve His cause and render our work for His sake.
Shorter Answer: The principal is Zakatable annually, the interest is to be excluded from Zakah calculation, and to be disposed in full as expiation for social cause (for e.g., giving it to the poor, repairing public washrooms, and helping debtors who are unable to pay off their debts, given to masjid). (Also refer Question # 7 & Question # 112, Question # 162 and Question # 224 for further details).
Long Answer: One of the conditions that makes zakat fard (obligatory) for a property is “tamalluk” that means being the complete possessor of that property. The complete “tamalluk” means the person’s having the property at his disposal. It is fard for a person to pay zakat for a property as long as that property is in his hand or in his possession and nobody else has any rights on that property and the benefit that will emerge from that property belongs to him.
In view of this condition, if you are still the complete possessor of this money although it is in fixed deposit, you are legislated to pay zakat on it. Presumably, despite its being in fixed deposit, you are the one who has the total rights and benefits to it as it is still on your disposal.
Consequently, the principal is subject to zakat because it is a debt on the bank [but]… you should not count earned interest in the amount, as subject to zakat, because interest is all forbidden, the earned interest is not yours, it doesn’t become your property according shari’ah and you are required to give all the earned interest to poor and needy or general social causes in order to keep one’s property pure and clean. In brief, you don’t pay your zakah from any impure thing that may come under your hand and whatever impure things that comes to you, must be given away to charity-like objectives (for e.g., such as giving it to the poor, repairing public washrooms, and helping debtors who are unable to pay off their debts).
(The above answer has been verified by Dr. Main Khalid Al-Qudah, Member of the Fatwa Committee of Assembly of Muslim Jurists in America)
According to Dr. Main Khalid Al-Qudah: “Paying interest money for the Masajid is [also] permissible because the money is prohibited for the interest receiver and his dependents only. If needy individuals are allowed to take that money, then the Masjid can take it as well, no difference, Wallahu Aalam”
Allahu A’lam (Allah (سبحانه و تعالى) knows best) and all Perfections belong to Allah, and all mistakes belong to me alone. May Allah (سبحانه و تعالى) forgive me, Ameen.