Q. 1. If a mosque get substantial income over and above what is required for the expense of the mosque, should it pay Zakah on its income? The income consists mainly of rental income from properties that have been gifted to the mosque. If it is payable what is the rate?
2. Should an association which is engaged in charitable work (mainly assisting needy students to pursure their education) pay Zakah on these incomes which are used for charity. What about Zakah on their wealth which consist of investments in shares in companies and other such investments?
A. 1. Zakah is not payable on the assets or on the income of a mosque.
2. If the charitable institution is in the form of regular waqf, zakah is not payable on its assets or income. But if the institution is not a waqf, zakah shall be payable on its zakatable assets. The zakah of its assets should be given to the poor persons who do not own the nisab of zakah.
Q. I have recently been told that it is permitted for a Muslim to deal in interest in America or UK i.e. a Muslim can open inte- rest bearing savings bank account in America or UK. The interest received from the bank should then be given to poor and needy Muslims in Pakistan or India. I am told that this ruling is based on the facts that non-Muslims should not benefit from the “interest” not taken by us. I am also given to understand that perhaps you have approved this ruling.
I must say that in America or UK I maintain Current accounts only and thus the question of interest does not arise. The same thing I have tried to do, wherever possible. My idea is based on the fact that a Muslim should have no dealings in the interest, be it as a receiver, writer, or giver.
Please comment on this aspect of “interest” and if your ruling is different for different regions, please advise your ruling for the major rejions of the world, such as America, UK, Asia, Saudi Arabia.
(Muhammad Saleem Desai, Al Khobar, Saudi Arabia)
A. The correct position is that dealing in interest is haram, both in a Muslim or a non-Muslim country. Some Jurists have opined that interest bearing loans can be given to a non-Muslim citizen of a non-Muslim country, and the interest charged from him is halal for a muslim. but this view has not been endorsed by the majority of the jurists. So, the correct view is that charging interest is not permitted in any case, no matter whether the debtor is a citizen of Muslim country or not.
As for opening a saving account in a non-Muslim country with intention to distribute its interest among the poor, I have never recommended or approved of it. I always advise the Muslims to keep their money in the current account. However, if somebody has opened a savings account, either due to his ignorance about the Shariah injunctions or because of his negligence, then, in that case only, he should give the amount of interest to the poor persons in order to dispose of this unclean money, and not to earn the thawab of sadaqah. But it does not mean that he should deliberately open an interest bearing account for the disbursement of its interest among the poor.
In fact, opening an interest bearing account amounts to entering into a transaction of interest which in itself is a clear sin. The one who has already committed this sin is advised to atone for it by giving the interest money to the poor, but one cannot be advised to commit a sin in order to alone for it by helping the poor. Taking bribe, for example, is a sin. If a person has earned some amount through bribes and he is unable to return it back to the original owners, he is advised to give that amount to the poor in order to atone for his sin to the best possible extent. But one cannot be advised to accept bribe with the intent of giving the money to the needy persons. The same principle is fully applicable to the interest transactions also.
Q. I have same interest credited to my account from my days of ignorance. However, I intended to give away this interest money by the end of this year. However, as you know, BCCI has been closed in UK and it is unlikely that we will get full refund of our deposits with them. My deposits consists purely of my own money. Can I adjust some of previously received interest against the loss of my own money in BCCI? If not, can you suggest some other way order to reduce my losses.
A. Yes, in this case you can adjust the interest money received earlier against the loss of your principal. The money you have deposited in the bank according to Shariah, is a loan advanced to the bank. You are entitled to receive in back in full. If the same bank has given you some amount in the name of interest, but has refused later to return your principal in full, you can treat the interest money received earlier as part payment of the principal and can use it for your own benefit to the ex- tent of the total principal deposited by you in the bank.
This ruling is based on the general principles of Shariah and on a Fatwa of Maulana Ashraf Ali Thanwi given by him orally and published in a collection of his discourses named “Al-ifadatul yaumiyyal” v.6 p.20 para 32.