Q.1. Earlier this year I liquidated my investment in interest-bearing accounts and placed them in a sort of investment which is locked for several years. I do not have any access to this money for the duration of the fund, but I expect to receive profits at the end of this period. Could you please let me know what zakah will be due from me on this investment.

Q. 2. You mentioned that zakah is due on the market value of shares in companies. May I ask whether this applies to all stocks and shares or there is a difference between shares held as an investment in the form of dividends and shares held to be sold when their price gets higher.

S. Abdurrahman, Riyadh

A.1. Money that is locked in an investment of this type is liable to zakah when the investment matures. So, when you receive your money back on its date of maturity, both capital and profits are zakahable at the rate of 2.5%. To say that it is liable to zakah every year is to place an undue hardship on the owner who may have little else to pay zakah from while the investment is locked.

A.2. There is a difference between the two types of investment in shares. If one is trading in shares, buying and selling according to the fluctuations of the market, then such shares are treated like other commercial commodities. Their market value is calculated on his zakah date and he pays zakah for that value every year. These shares are not different from the merchandise a businessman has in his shop, supermarket or other outlets. The rate of zakah payable is 2.5% of the market value every year.

By contrast, a person holding shares in a company for the income they generate does not pay zakah on the value of his shares, but on the profits or dividends he receives. His zakah becomes payable on the day of receipt of such returns, whether they are paid annually or every six months, or shorter or longer periods. He does not wait for a year after receiving his payment. Rather, he pays his zakah straightaway at the rate of 10% of the amount of returns. This ruling is based on analogy with agricultural land irrigated by rain only. Its produce is liable to zakah on harvest day at the rate of 10%.

Is a necktie a symbol

Q. In one of your answers you said it is permissible to wear a necktie. You have disregarded its significance. In my opinion, a necktie is a symbol of the crucifixion. As such, it would not be permissible to wear.

Nadeem Rizvi

A. Indeed, it would not be permissible to wear if it is truly a symbol of the crucifixion. But it is not. I lived for many years in Britain, and I never met anyone who suggested that such symbolism exists. Besides, had it been ever thought to have such association, we would have seen all priests, bishops and archbishops wearing it. But none of these wear it except for clergymen who wear ordinary suits, shirts and ties. Members of the Christian clerical order may have the cross symbol on their church garments, but none of these has a necktie as part of their official clothing. The reader suggests that a necktie looks like a cross, but it does not without a long stretch of the imagination to suit our fancy.

One more point, the necktie has become part of the normal dress in many parts of the Muslim world. As such, it is perfectly permissible to wear.