If a person invested in the Almabroor Buffalo Scheme then how will the zakāt be calculated on the capital invested?
For example, a person invests R 1 million in the Buffalo Scheme, how will he calculate his zakāt at the end of the year?
1) Pay 2.5% on the R1 million? or
2) Pay 2.5% on the current value of Buffalos at the end of the year? Or
3) Will the nisaab of cattle apply?
NB: this person has other zakātable assets also (cash, gold etc)
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
Investments in the Al Mabroor Buffalo Scheme are for capital gain. When animals are purchased for capital gain, they will be treated as merchandise. Hence, the laws of zakāt on merchandise will be adhered to and not the laws pertaining to zakāt on animals.
Zakāt is obligatory on the current market value on the day of calculating one’s zakāt. For example, a person invested R1 million in the Al Mabroor Buffalo Scheme. On the day of calculating one’s zakāt, the market value of his investment is R 1,500,000. He will pay zakāt on R1,500,000 plus the value of other zakātable assets.
And Allah Ta’āla Knows Best
Mawlana Faraz ibn Adam
Student Darul Iftaa
Leicester, United Kingdom
Checked and Approved by,
Mufti Ebrahim Desai.