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Fatwa CenterZakah on land whose whole price has not been paid yet
Question
Assalamualaikum, my question is regarding zakaat,, i buy an open land (for business) on installments for 5 years, & in last 2 years I paid 200000 rupees & balance is 300000 rupees I have to pay in next 3 years, my question is should I pay zakaat on this 200000 rupees which I paid to the owner ?or after finishing all the installments ? plz reply.jazaakAllah.
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His Slave and Messenger.
If you meant to ask if it is obligatory upon you to pay Zakah on the 200,000 rupees you have paid, then the answer is that it is not obligatory upon you to do so (since you no longer own them); rather, their Zakah will be obligatory upon the seller if he saved them, a lunar year passed over them, and they reached the Nisaab (i.e. the minimum amount liable for Zakah).
As for the land you have bought with the intention of trading in it, it is liable to the Zakah of tradable objects as we have explained in Fatwa 90450.
However, if you do not have what covers the remaining debt of the price of the land, then you can deduct its value from the total value of the land and pay Zakah on the remaining part. Al-Mawsoo‘ah Al-Fiqhiyyah (Fiqh Encyclopedia) reads: "Most of those who adopted the opinion that debt waives the Zakah on its amount included in the whole money that is liable to Zakah stipulated that the giver of Zakah does not have money to pay off his debt except that which is liable to Zakah. However, if he has other assets in excess of his basic needs, he should put them against the debt so that the money liable to Zakah will be complete and thus he gives Zakah on it." [End quote]
Allaah Knows best.
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