Is Zakat payable on a cheque?

For Zakat to be due on a cheque received by you, the following conditions should be met:

Physical or constructive possession of the value of the cheque must be established
OR
The cheque must have been received in exchange of the sale of some commercial goods

When you pay in a cheque, you’ll be able to use the money four working days later – but you won’t be sure the cheque has cleared (i.e. the money is really yours) until six working days after you’ve paid it in. If you use the money in the meantime, you might have to pay it back. Therefore, physical or constructive possession of the value of the cheque are never achieved just by holding the cheque.

Only in some cases (i.e. when a cheque is signed by the bank e.g. banker’s draft etc) one can assume that possession of a cheque amounts to a constructive possession of the value of the cheque. (Mufti Taqi in Fiqhul Buyu’ p441-452 and AAOIFI Shariah Standards (16) item 6/1 and 6/2)

Based on the above, there will be no Zakat on a cheque in the following scenarios:
If the cheque was received in exchange of a personal item.
If the cheque was received as a gift or as part of a distribution of a deceased’s estate.
If the cheque was received in exchange of a service offered (i.e. accounting, tuition etc) or as a payment for a wage.

Zakat will be paid on a cheque in the following scenarios:
If the cheque was received in exchange of some commercial goods. (see Zakat on money owed to you)
If one has received a banker’s draft.
If one has received a cheque signed by a Building Society.

And Allah knows best!

Reviewed on 30/11/2021