Zakah — practice questions

Correct answer: B. Clauses 2/1/1, 7/2/2 and 8/2: Under the net assets method, Zakah base = Zakatable assets − (liabilities payable during the year as at the balance sheet date + instalments of liabilities falling due in the coming period + rights of holders of unrestricted investment accounts + minority rights + sovereign, Waqf and charitable rights + rights of non-profit organisations without a specific owner). Capital, issuance premium and reserves are owned by the company and are not debts, so they are not deducted; provisions against current assets are not deducted, since those assets are valued at market value.

Correct answer: D. Clauses 2/2/1 and 2/2/5: The Institution or company is committed to pay Zakah where there is an enforceable Zakah law, where its articles of association stipulate a commitment to pay Zakah, or where its general assembly issues a Zakah commitment resolution. Absent any of these, payment of Zakah is the responsibility of the shareholders and investment account holders, and the Institution must indicate the amount of Zakah payable per share or per given investment account balance. Profitability is not a condition (Clause 2/3/2).

Correct answer: A. Clauses 3/3 and 5/4/1: The Nisab for agricultural produce and fruits is 653 kilograms, and no Hawl applies, since Zakah falls due on harvesting. The rate is one-tenth (10%) for non-irrigated land, half of one-tenth (5%) for irrigated land, and three-quarters of one-tenth (7.5%) for partially irrigated land. Irrigation expenses are not deducted from Zakatable assets (Clause 5/4/7). Produce held for trade would instead be subject to Zakah on articles of trade (Clause 5/2/3).