Title: 400 people have bought share in a comapny, one share cost 1000. the comapny has bought 2 Houses. The share prices have gone up to 1200 due to the appreciation of properties bought. Is zakah payable on total amount 1200 or on capital invested 1000 or on profit 200. Please adivse as much as possible as i am really confused.

Question: 400 people have bought share in a comapny, one share cost 1000. the comapny has bought 2 Houses. The share prices have gone up to 1200 due to the appreciation of properties bought. Is zakah payable on total amount 1200 or on capital invested 1000 or on profit 200. Please adivse as much as possible as i am really confused.

Answer ID: 1249Posted on: Sep 1, 2020

Bismillah hir-Rahman nir-Rahim !

(Fatwa: 373/366=D)

If the shares were purchased as capital gain then the zakah will be charged on them as per the present market rate. But, if the shares were bought in order to be a partner in the company and receive annual profit then the zakah will be levied on the part of the market rate of the shares which will be liable for zakah e.g. 60% of the company is spent on building and machinery while 40% of the company is raw, prepared or cash, then the zakah will be liable only on 40%.