Zakat On Textile Manufacturing Unit
Please get an overview of Sharia of Zakat in accordance with Ghamidi Sahab’s understanding at the following link: Discussion 121490 • Reply 121494 It is important because the answer below is ideologically rooted in the description provided above. ____ Your Zakat obligation would be as follows: Production Zakat @ 5% will apply to the value of Gross Production in the factory on value addition only. Your share would be 50% of that Zakat obligation. ( Raw material, being a part of the means of production, is considered exempt from Zakat. Value addition will be considered actual production in this case . ) Wealth Zakat @ 2.5% of your total wealth at year-end. 50% of Cash in hand/Cash at bank available with business as at that date, should also be included in your wealth calculation, if it is at your disposal and readily available for distribution. However, if it is tied up in the entity’s working capital equation, then it will also be considered as part of means of production, hence exempt. – Any taxes paid ( either by the entity or individually ) can be offset against the Zakat obligation.