Q. Someone has a residential building which he lets out. He also has several plots, some with buildings and some unbuilt. He intends to construct apartments on these for letting. He has been paying zakah on the purchase value of these plots. Some people have suggested to him that since they are intended for building to generate income, they are not taxable. Moreover, he bought four pieces of land to gift to his four children. He calculates his zakah on the basis of the Gregorian year. Is this acceptable? Which of these properties is liable to zakah?
M.A. Miah, Jeddah
A. The normal period for the calculation of zakah is the lunar year, which is 11 days shorter than the Gregorian year. It is true that these days, with all transactions done on the basis of the Gregorian year, it is difficult to maintain a separate accounting date for zakah. But this is not impossible. It only takes a little extra effort, whether a person has a large business which employs accountants, or he does his own accounts. Therefore, it is advisable to make every effort to ensure that zakah is calculated on the proper zakah date, using the lunar year.
Most people calculate their zakah liability in Ramadan, to ensure that they receive the extra reward for good deeds done in that blessed month. While this is appropriate for a person with a small zakah liability, rich people may pay out their zakah by advance installments, on a regular basis, then in Ramadan, or on their zakah date, they calculate their total zakah liability and pay out the remaining balance. In this way, they ensure that they will help the poor throughout the year, and get the benefit of extra reward in Ramadan. It is necessary to emphasize that the earlier payments should be advance payment, out of zakah for the current year, not the zakah already due. Whatever zakah is due should be paid out on its due date, and not delayed.
As for this reader’s zakah liability, he seems well-aware of it. 1) The residential building he lets out: zakah is payable in this case on the net income of the building. He should deduct from the rent he receives any expenses he incurs in maintaining the building, such as property tax, services provided, administration costs, including any accounting or wages for cleaners or attendants, etc. He pays his zakah on the net income, at the rate of 2.5 percent. The same applies to the other buildings he has.
2) The unbuilt plots of land. These have been bought for investment, with the intention of building houses for rent. Although they may not bring any income at present, yet it is possible to use these in different ways to get an income. Therefore, they are liable to zakah at the market value on the zakah date, not the purchase price. The reader should, on his zakah date, estimate the value of these plots of land and pay zakah on the basis of that value. We have to consider here that although the intention is to build up these plots, this may take several years. The owner may not mind that, if he has sufficient income from other sources while the value of the land increases. To say that they are not zakahable until they have started to generate an income can easily become a means for zakah evasion. When the building and letting start, they are treated differently.
3) The four plots bought for the four children. If these remain in the father’s hand, they are also liable to zakah each year at the market value on the zakah date in that year. On the other hand, if the father actually gives these lands to his children and they become the owners, then each is treated according to the intention of its owner. If it is held for investment, then it is zakahable every year. If it is intended for the owner’s own use to build a house for his own residence, then it is exempt from zakah.
Borrowing for business
Q.1. As a businesswoman running a small business, I miss out on some opportunities which could be very useful in business, because I do not have the funds to take up such opportunities. The best option I have is to take out short term loans from a bank. Is this allowed? If not, what is the solution, considering that I am very reluctant to enter into partnership to increase my capital, and I have no means of making a project-based partnership.
Q.2. Under which circumstances is the method of test tube babies permissible, considering that at one stage of the process, embryos are destroyed.
(Name and address withheld)
A.1. I understand your reluctance to go into partnership or to start a project-partnership arrangement. But I have no solution for you other than the normal business arrangement. The only way is to agree with your suppliers on a method of payment which gives you some flexibility, but this is something you know better than me. If you take a bank loan, the bank will charge you interest, and in this type of activity, such interest is usurious, according to the majority of scholars. As such, it must not be resorted to. Having said that, I should perhaps point out that a number of scholars look at the type of arrangement you are looking for in a different light. They consider the bank charges as a sort of commission in return for providing the funds when needed. I am not in favor of this view, and I cannot advise you to take it up.
The alternative that you need to look at is some sort of arrangement with an Islamic bank, which operates on a profit-or-loss-sharing basis. If this is available, then it will be the answer to your dilemma. If not, then trust to God and steer away from usury as much as you can. You will find that although your earnings may be less, you will have the blessing of their being perfectly legitimate earnings. This should compensate you for any loss you think you have incurred.
A.2. The technique of test tube babies is permissible, provided that the parties involved are man and wife. No third party may be involved in such an arrangement. This means that the wife’s egg is taken to be fertilized by her husband’s sperm, before the fertilized egg is planted again in the wife’s uterus. If the egg is taken from a different woman, or the sperm used is that of a man other than her husband, then the technique is not permissible to use. If unhealthy or unwanted embryos are destroyed, medical doctors say that these are not yet the sort of potential life that prevents abortion. If this is true, then it is permissible.
Marriage and dowry
Q. The dowry system in India places a heavy burden on families with daughters. What should be done in order to eradicate this system? May I also point out the fact that families insist on marrying within their own class, dividing Muslims into different classes and giving each certain distinctions, so that their privileges may be perpetuated. Please comment.
S. A. Parwez, Jubail
A. I have repeatedly pointed out that the dowry system as practiced in India and Pakistan is contrary to the Islamic system of marriage. In Islam, it is the man who has to pay a dowry to his prospective wife. In those countries, it is the reverse, with a man demanding a large amount of money, or gold, for the “great privilege” he is about to confer on the woman’s family by marrying her. This leads to difficult problems for both families, especially when the marriage does not settle well.
The proper way for Muslims of these countries is to return to the correct Islamic method of marriage, requiring the husband to pay a dowry to his wife, as her right in return for becoming lawful to her husband. That dowry becomes her own property, and she has sole control of it. This is the proper way, because it is the husband who is receiving an advantage as a result of marrying, and he should pay for that advantage.
The only way to ensure such a return to the Islamic way is for scholars to start a campaign of educating the public in the proper way of Islamic marriage. This should be supplemented by encouraging young men of marriageable age to relinquish what they may receive when the Hindu traditions are adopted, i.e. getting a dowry, and to opt for the Islamic way. Moreover, families with daughters in marriageable age must be encouraged to take a stand, refusing to pay anything to prospective suitors, even if that would mean that some girls would remain unmarried. All this requires a determined and coordinated effort, in which the government, particularly in Pakistan, may assist. The point to be stressed is that the dowry system, as now practiced, is borrowed from Hinduism. When people realize this, they will be ready to discard it.
The criterion for selecting a marriage partner is piety and God-fearing. The Prophet says: “When a man of an acceptable standard of faith and honesty comes to you with a proposal of marriage, then accept his proposal.” Unless you do, much strife and corruption will spread in the land. Other considerations, such as wealth, social position, connections, etc. are of no value in the Islamic system.
