Q: Are all assets subject to Zakat?
A: Not all assets are subject to Zakat. Had Allah made Zakat binding on all that we own, we would have been placed in difficulty. Allah out of His infinite mercy specified assets which are most suitable to be considered for Zakat payments in contrast to others.
Furthermore, only those items have been allocated for Zakat which have intrinsic growth. Although Zakat is calculated on the capital base as well as profit, the actual payment can generally be covered by the profits. This is understood from the following verse:
“And they ask you what they should spend. Say, “The excess [beyond needs].” Thus, Allah makes clear to you the verses [of revelation] that you might give thought.” (Quran 2:219)
According to one explanation of this verse, the excess refers to the capital appreciation and capital gain of Zakatable assets.
And Allah knows best!
Mufti Faraz Adam