ZAKAT ON SHARES
Zakat on Shares is obligatory to be fulfilled once the market value of your investment tools i.e. shares, stocks exceeds the Nisab.
A share is a divided-up unit of the value of a company. If a company is worth $100 million and there are 50 million shares in issue, then each share is worth $2. A company’s shareholder is a partner in ownership of the company in accordance with the amount of shares he owns in the company.
All investment tools such as stocks, shares, ETFs, unit trusts, REITs, and others are payable for Zakat.
Unlike Zakat on Savings which takes the lowest value of savings during the Haul period that has reached the Nisab, Zakat on Shares is 2.5% the market value of the shares at end of the Haul period or financial year period. This is because shares fluctuate in value more rapidly based on prevailing market conditions.
CALCULATING ZAKAT ON SHARES
CHECK THE NISAB
You may check the Nisab for the month on www.zakat.sg or in Berita Harian.
FIND OUT THE NUMBER OF SHARES YOU OWN
You may check this figure in your brokerage accounts.
FIND OUT YOUR HAUL PERIOD
If you own only a single type of share (shares from one company only), the Haul period is 355 days from the date of purchase of shares. If you own shares from multiple companies, the Haul period is the end of the financial year of the companies.
CALCULATE THE VALUE OF THE SHARES YOU OWN
Find out the value per share unit at Haul date (for single company shares).
For shares from multiple countries, find out the value at the end of the financial year.
SHARES FROM A SINGLE COMPANY
Determine the total value of shares:
Number of shares × Value per unit
If the total value is below Nisab, there is no Zakat payable.
If the total value is above Nisab, Zakat payable: Total value of shares × 0.025
SHARES FROM MULTIPLE COMPANIES
Determine the total value of shares for each company: Number of shares × Value per unit
Add together the grand total values of all companies. If the total value is below Nisab, there is no Zakat payable.
If the total value is above Nisab, Zakat payable: Total value of shares × 0.025
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