I have given somebody a sum of money to invest in trade in return for a definite share from the profits at the end of every four months: I may take the capital and profits together, or only the profits and leave the capital to be reinvested in trade. How should I pay Zakaah on that money, given that the profit is spent immediately and no lunar year elapses on it?

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His Slave and Messenger.

The profit of the capital invested in Mudhaarabah is a part of the capital on which Zakah is due when a lunar year elapses on it, even if it comes a short while before the end of the lunar year.

Hence, we tell the questioner that Zakah should be paid for the profits along with the capital on which a lunar year has elapsed, and no Zakah is due on what you have spent of it as well as of the capital itself before the end of the lunar year.

Here, it should be brought to mind that the profit of Mudhaarabah should be a percentage of the profit, and it is not permissible to assign a definite sum of money to be taken annually or monthly, whether or not there is profit.

Allaah Knows best.