When does the zakat year begin?
The zakat year begins on the date on which you were first in possession of wealth above the nisab.
This will be your seed date, whenever it comes around you will have to calculate zakat, irrespective of any fluctuations in the amount of wealth in your possession.
The only situation in which your seed date will change is if you were to become totally bankrupt and lose all of your assets and belongings. In this situation, your new seed date will begin when you are once again in possession of wealth above the nisab.
If you are unsure of your seed date, then estimate it to the best of your ability.
On Junaid’s 18th birthday he is given a gift of £1,000. This is the first time he has owned wealth over the nisab threshold, so his zakat year begins on his birthday. Junaid calculates the equivalent date according to the lunar calendar, and every year this date comes around, he calculates his zakat.
- My wealth decreased below the nisab for a few months during the year, do I still pay zakat?
As long as you are in possession of wealth above the Nisab threshold at the beginning and end of the zakat year, zakat will be payable, even if your wealth dipped below the nisab for most of the year.
- I earned a large amount of cash a few days before the zakat year was up. How do I calculate my zakat?
I earned a large amount of cash a few days before the zakat year was up, do I pay zakat on this amount now, or after a year has passed from when I received it?
You pay zakat when the zakat year has elapsed, irrespective of when particular portions of your wealth came into your possession. Even if the cash came into your possession a day before the zakat year had elapsed, you would have to pay zakat on it the following day.