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Saturday, 13 June 2015

UAE Fatwa Q&As: How much zakat should I pay?

 You should not sever the relationship with your brother. Aside from the command of Allah in this regard, it is always mutually beneficial to keepcontact with him because it would allow you to advise him and potentially change his behaviour. Muslims have a duty to communicate with their blood relatives even if they have been treated badly by them.
Abu Hurayra (may Allah be pleased with him) reported that a person said to the Prophet Mohammed: “O Messenger of Allah, I have relatives with whom I try to have a relationship, but they sever (this relation). I treat them well, but they treat me badly. I am kind to them but they are harsh towards me.”
The Prophet replied: “If the matter is as you have said, then it is as if hot ashes are being thrown in their faces and there will always remain with you on behalf of Allah support with regards to them as long as you adhere to this (path of patience).”
Q: I am confused as to what amount I need to pay as zakat. I recently earned Dh180,000 and invested it in the stock market. I also have about Dh2,500 in a current account and am paying off an interest-free loan of about Dh18,000. I know that zakat is usually 2.5 per cent of a Muslim’s total wealth. So to which amount would this be applied?
A: Zakat is of paramount importance in our religion for, as the name implies, it is a purification of one’s wealth that has many spiritual benefits for giver and recipient.
To ascertain the amount of zakat you pay, calculate the remaining assets after deducting any debts you owe and then determine whether they exceed the nisab threshold of 85 grams of gold, as per its value on that same day. Provided your net worth is more than the nisab threshold, you would then need to pay zakat at a rate of 2.5 per cent on all assets.
To answer your question specifically, on the relevant zakat payment date you would need to add the financial value of your shares and any free cash. Provided you do not own other fixed assets such as property, you may deduct the amount of interest-free debt that you owe from this amount. If the resultant amount is above the financial value of 85 grams of gold then you would need to pay zakat at a rate of 2.5 per cent on all assets.
If the shares were purchased with the intention for resale then the entire holding, as per their market value on the nisab date, would be subject to zakat.
(The National UAE / 11 June 2015)
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Islamic Development Bank increases sukuk programme to $25 bln

The Islamic Development Bank (IDB) has increased the ceiling of its Islamic bonds (sukuk) programme to $25 billion from $10 billion, as it aims to expand its financing across member countries, the Jeddah-based lender said on Tuesday.
An expanded programme would support the AAA-rated bank's aim to issue one sukuk publicly every year with a minimum size of $1 billion, while keeping pace with growing investor requests for private placements.
IDB sukuk are highly sought after by banks since the lender is designated a zero risk-weighted institution by the Basel Committee, the international banking supervisory body. This means its paper can be used to manage capital adequacy on bank balance sheets.
The programme has now been expanded three times since it was set up in 2005 - the IDB raised $4.4 billion in 2014 and last tapped the market in March with a $1 billion deal.
Most IDB sukuk have been issued with maturities of 5 to 7 years, but the lender wants to build a wider yield curve. This would help price longer-dated infrastructure transactions which the IDB wants to promote.
The bank, which operates to promote economic development in Muslim communities, has 56 member countries including Saudi Arabia, Libya and Iran as its largest shareholders.
The IDB also approved development projects worth a combined $450 million, including a $200 million energy project in Mozambique and $70 million to finance the import of agricultural equipment in Kazakhstan, it said in a statement.

In 2013, the IDB more than tripled its authorised capital to $150 billion. It provides financing, loans and technical assistance for development schemes which follow Islamic principles, such as bans on interest payments and pure monetary speculation.
(Reuters / 10 June 2015)
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