Ushr On Rental Income
1 . Yes, principally, it is on Gross Production. However, in case of mortgage , if payment relates to the same property, it can be deducted, since it relates to securing ownership of the very property thus making it an inevitable means of production. For industrial production , its Zakat as per Ghamidi Sahab should be based on value addition only. Please see: Discussion 50336 2 . If it involves actual labour, then 5% would be applicable on rental income as Zakat on Production. It is for the person to decide considering the nature of labour he or she is expending in managing the property. 3 . There are two major domains of Zakat namely Wealth and Production. For production, zakat applies on gross amount as soon as production happens, while for wealth, zakat applies once a year on a fixed date on all the wealth (excluding exemptions). This is as per established Sunnah of Prophet (SWS) for wealth and Production. When production happens, the zakat becomes due immediately on the gross amount (irrespective of the fact when one actually pays it). After payment of that Zakat, whatever left is one’s wealth. And if that wealth still stays with the person till the year-end i.e. the date fixed for payment of Zakat on wealth, then the whole wealth is subject to Zakat (that production earning as well which has become wealth of a person now). If one spends the same wealth one day before the year-end date, then there is no wealth zakat on that wealth. Both these heads are subject to Zakat only if they reach the set Nisab for Zakat Obligation. 4 . Yes, all taxes paid to Government (Muslim or Non-Muslim) can be offset against Zakat Liability. 5 . This matter is based on ‘ijtihadi ihaaq’ done by Ghamidi Sahab, considering the nature of different sources of income and how they correlate with each other. For detailed FAQs covering all these topics , please see: Discussion 46733 • Reply 46737