Zakaat on fluctuating portfolio

Investment Questions and Chats Crypto
#1

Salaam Aleykum,

Hope someone can clarify something regarding zakaat on my portfolio.

I have a crypto portfolio that went up and down in relatively big percentages the last 12 months. I pay my zakaat on the 27th of Ramadan each year and last year my portfolio had a total value of 20K… it went up tot 150k in August and back down for 50k in December. My current value is around 300K.

Zakaat has to be paid on cash/gold/silver etc which hasn’t moved in the last 12 months. So my question is how to calculate what I have to pay this year? Do I take the lowest point in the last 12 months? For instance 50k or do I take an average of 100k? It doesn’t make sense to pay on the full amount because it just went up the last couple of months and can go down as easily as it went up.

Can someone help/clarify this for me?

Jazak Allahu Ghair.

Armin

#2

Salaam,

You would pay on the full value of your portfolio on 27th of Ramadan, if it is above the nisaab amount. There is no basis for using an average or lowest within the year method.

#3

Ok, but isn’t it the case that is should be capital that has that value for 12 months? I’m confused on this matter.

#4

Salaam,

You pay zakat when the zakat year has elapsed, irrespective of when particular portions of your wealth came into your possession. Even if the wealth came into your possession a day before the zakat year had elapsed, you would have to pay zakat on it the following day - if total wealth is above nisab.

InshaAllah this clears things for you.

#5

Jazaak Allahu Khair brother!

One last point to clarify. I still have a mortgage of 150k. Do I deduct this of the total amount, because this is a dept?

Salaam

#6

According to scholars you can deduct upto one lunar years worth of capital repayment (not the interest element) as debt from your calculation.

#7

Salaam

Would you pay zakaat on the gross or the net (after tax)?

Where tax is due to be paid to the state within the year - ie the tax is seen as a debt/ owing to take place/ due once the tax date has been reached.

(In normal circumstance the tax due amount i would keep aside and not spend as it technically belongs to the tax man until date of collection)