Re: Paying zakat twice
Peae USResident
I was going to answer this question but then recanted. For a car that is being used there is no zakat on it. However, for an extra car that is considered luxury then the zakat is payable on it.
In a similar sense don't you think that the business is being used and no zakat is on it, until it provides "produce" i.e. the company grows or the investment grows. Then the amount in zakat is payable only on the growth. Like you mentioned before.
I think there are distinctions made between useful or required amounts in order to undertake the function ... i.e. land required to grow crops. Car required to travel etc. to those amounts that are considered superfluous or luxurious upon which zakat is paid in addition to un-used amounts which I guess are un-used because they are not required but are considered excess.
In this sense both of the methods are correct but are employed in different conditions.
Yes that is the key point. Excess is subject to zakat. However the excess is subject to everyones living conditions. Growing wealth is also subject to zakat. Retirement savings is definitely not growing wealth unless it is invested after we have cashed it after retirement. Now whether we consider it excess is a matter of interpretation and subject to many constraints and circumstances.
Personally here is how I would do it. Say I get $100000 in retirement savings. I would 2.5% zakat when I get it i.e. $2500. Then say I draw $1000 from it each month as my sustenance. After the passage of a year I would be left with $85500. I would again pay 2.5% zakat that year on it i.e. $2137. Again keep withdrawing $1000 from it for a year as sustenance and then I would be left with $71363. Again I would pay zakat on this and so on. These amounts are pretty unrealistic though but serve only as an example.
One thing that I in reality do disagree with though is the nisab amount even though I do not practice what I think. I think the nisab amount should be redefined because it is just absurd according to todays living standards.