Investment of Zakat Funds in Profit Generating Projects Without Attributing Individual Property Title to The Beneficiary.

Bismillah Arrahman Arrahim

Praise be to Allah, the Lord of the Universe, and Prayers and Blessings be upon Sayyidina Muhammad, the last of the Prophets, and upon his Family and his Companions

RESOLUTION NO 15 (3-3)

CONCERNING INVESTMENT OF ZAKAT FUNDS IN PROFIT GENERATING PROJECTS WITHOUT ATTRIBUTING INDIVIDUAL PROPERTY TITLE TO THE BENEFICIARY

The Council of the Islamic Fiqh Academy, holding its third session, in Amman, Hashemite Kingdom of Jordan, from to 13 Safar 1407 H (11 to 16 October 1986),

After reviewing the studies made on the issue of “Investment of Zakat funds in Profit generating projects without disbursing it to the individual beneficiary

After listening to the opinions of the members and experts on this subject;

RESOLVES

It is permissible, in principle, to put Zakat funds in investment projects which eventually lead to be owned by those who are deserving of Zakat, or which are under the control and administration of the entity which is responsible and has the jurisdiction over collecting and distributing Zakat, provided that it is done after satisfying the basic and immediate needs of the beneficiaries and with proper guarantees against loss.

Verily, Allah is All-Knowing 

Zakat on Wealth That is Placed in an Islamic Bank.

As is well known regarding zakat on wealth, it is that which a man pays from his wealth that he has possessed for a year, like wealth from business, harvests, gold and silver. However…

As is well known regarding zakat on wealth, it is that which a man pays from his wealth that he has possessed for a year, like wealth from business, harvests, gold and silver. However, how about zakat on the wealth that is placed in an Islamic bank if it reaches the minimum amount (nisab)? Is it the percentage gained (on the account) itself?

According to As-Shaykh Ibn Baz from the book of “Fatawa Regarding Fasting and Zakah”, the money that is placed in the Islamic bank has the same ruling as any other type of wealth. Thus, Zakat is due on it if it is possessed for a year along with its profit gained.

The Zakat is 2.5% on the original sum and the profit gained.