Salam everyone
Glad to be one of the community members. I am not sure if this was asked before. But I have a question about when the zakat is due. Is it that every year we run the calculation on whatever is on my portfolio and get zakat and estimate and pay zakat? Or is it the case that we do this calculation every time we sell the shares.
Thanks
As-salamu Alaykum Wa Rahmaa Tu’lahi Wa Brakatu,
Zakat is a personal yearly obligation.
Zakat is due on the day your personal net worth is above the nisab.
The date isn’t based in the Gregorian Calendar, it’s based on Hijri calender.
Regardless of when you started investing or if you’ve made a profit, you calculate the zakat on the day it is due and pay it off.
For example:
Person A reached nisab on 1st of Shaban
A year later, Person A must pay zakat in 1st of Shaban as long as it is permitted
10 years later, Person A started investing and has a total asset allocation of £1000
10 years later, during the same year he has started investing, he must again pay zakat on the 1st of Shaban
If he started investing on the 2nd of Shaban, he must pay zakat on the upcoming zakat date (i.e. the next 1st of Shaban)
Hope this has helped.
Jazakhalla khairan,
Maheen