Q: We in the Muslim community have a savings account which we call (committee). Just an example, if, for instance, I’m paying into that and i receive a lump sum because my number was for example say 5 before the savings finish and i am still paying until number 80, do I have to pay Zakat on the lump sum i have received. JazakAllah.
A: First of all, one must ensure that they make a note of how much they are contributing and how much they have taken away by the time the Zakat calculation comes.
Secondly, it is worth noting that the people taking part in a “committee” scheme are all at some point either a “creditor” or a “debtor”. Therefore, the money contributed can either be a loan they are giving to other members or a loan they are repaying back.
For Zakat purposes, the treatment of money raised through the “committee” scheme is as follows:
1) If the person has been contributing towards the fund but he has not taken anything from it yet: on his Zakat day he will pay Zakat on all the money he contributed up to that point.
2) If the person has taken some of the money from the fund, he will have to check the following:
– has he taken more money from the fund than he contributed? in which case, the extra amount acquired is a loan, and therefore, he will be able to deduct that amount
Example: Bakr contributed £1,000 but he has taken £1,500 from the fund. On his Zakat day, he will deduct £500 from his Zakat calculation provided that this amount will be repaid into the ‘committee’ fund within the 12 lunar months.
– has he taken less than he contributed from the fund? in this case, he will have to pay Zakat on the remaining contributed amount in the fund.
Example: Zayd contributed £1,000 into the fund. He has taken only £200 from it by the time his Zakat day comes. He will have to pay Zakat on the remaining £800.
And Allah knows best!
Mufti Billal Omarjee