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.