1.Profit from Earning
1761. If a person earns by means of trade, industry or any other ways of earning, like, if he earns some money by offering prayers and fasting on behalf of a dead person. Moreover, if it exceeds the annual expenses for maintaining himself and his family, he should pay Khums that is one fifth of the surplus, in accordance with the rules, which will be explained later.
1762. If a person acquires wealth without having worked for it, like, if wealth is received through the will of someone or someone gives him a gift or he receive a prize, and that wealth exceeds his own annual expenses, he should pay Khums from the excess.
1763. There is no Khums liability on Mahr, which a wife receives, nor on the property, which a husband gets in exchange of divorcing his wife by way of Khula. In addition, the same rule applies to the property, which one inherits according to the genuine laws of inheritance. However, if a person have a distant relative and does not know about it, as per obligatory precaution, he should pay the Khums from that inheritance if it exceeds his annual expenses.
1764. If a person inherits some property and knows that the person from whom he has inherited did not pay Khums from it, heir should pay its Khums. Moreover, if that property itself is not liable for Khums, but the heir knows that the person from who he has inherited, owes some Khums, he should pay it from the deceased's estate.
1765. If a person saves from the annual expenses because of economising and frugality, he should pay the Khums. Likely, if the expenses of a person are borne by someone else, that person should pay Khums on his entire earning.
1766. Things upon which Zakat is paid, which will be explained in the rule number 1861. If after paying off the Zakat, it exceeds his annual expenses, he should pay the Khums on it.
1767. If a person gives away a property as Waqf to some individuals, like his sons, and if that son does farming and plantation on that property, and acquires from it an earning which exceeds his annual expenses, he should pay its Khums. Similarly, if he gains profit from that property in some other manner, like if he leases it out, as per obligatory precaution, he should pay Khums from the amount, which exceeds their annual expenses.
1768. It is not obligatory upon a poor man to pay Khums on the wealth he received by way of Khums and Zakat. Nevertheless, as per obligatory precaution, he should pay the Khums of the wealth obtained by the way of recommended (Mustahab) Sadaqa, which exceeds his annual expenses. However, if he earns profit from the property given to him, by the way of Khums, Zakat and Sadaqa like, if he gets fruit from a tree which has been given to him by the way of Khums, and that exceeds his annual expenses, he should pay Khums from it.
1769. If a person purchases a commodity with the money on which the Khums has not been paid, that is, if he says to the seller that: "I am purchasing this commodity with this money", so if the religious authority allows the one fifth of the transaction, transaction of that amount is valid. In addition, the person should give the one fifth of the commodity purchased to the religious authority and if does not allow it then
the transaction of that amount is void. So, if the money which the seller has received is not consumed, the religious authority will take Khums of the same money, and if the money had been consumed, the religious authority will ask for the money in exchange of the Khums from the seller or the buyer.
1770. If a person purchases a commodity, and after the transaction, pays its price from the money from which he has not paid Khums, the transaction will be in order, but he will be indebted by one fifth of the amount to the seller since he paid by a money in which Khums was included. Moreover, if the money paid to the seller is not consumed, the religious authority will take one fifth from it, and if it had been consumed, the religious authority will ask for the money in exchange of the Khums from the seller or the buyer.
1771. If a person purchases something on which Khums has not been paid, if the religious authority does not allow the one fifth of the transaction, the transaction of that amount is void. In addition, the religious authority can take the one fifth of that commodity, and if he allows then the transaction will be valid. The buyer should pay off one fifth of the money to the religious authority and if he had given it to the seller, he can take it back.
1772. If a person gives a gift from which Khums has not been paid, the ownership of one fifth of that commodity will not be of the owner.
1773. If a person acquires wealth from an unbeliever, or a person who does not believe in paying Khums, it will not be obligatory for him to pay the Khums.
However, if a land is purchased from a Kafir – e – Zimmi, which he bought from a Muslim, who have not paid its Khums, he should pay the Khums according to the details, which will be mentioned later.
1774. It is obligatory upon the merchants, the earners, the artisans, and others like them that when a year passes since they started earning, they should pay Khums from whatever is in excesses of their annual expenditure. In addition, if a person, who is not earning, makes an unexpected gain, he should pay Khums after a year has passed since he gained, on the savings, which exceeds his expenditure for that year.
1775. A person can pay Khums whenever he earns a profit during a year, and it is permissible to delay payment of Khums until the end of the year. Moreover, there is no objection if one adopts the solar year for the payment of Khums.
1776. If a merchant or an earner who should fix a year for payment of Khums, if makes a profit, but dies during the same year, his expenses until his death should be deducted from the profit, and Khums should be paid on the balance.
1777. If the price of a commodity one purchases for the purpose of business shoots up, and he does not sell it, and its price falls during the year, it is not obligatory on him to calculate Khums on the increased prices.
1778. If the price of a commodity which a person purchases for the purpose of business shoots up, and he does not sell it till after the end of the year, expecting that the price will rise, and then the price falls, it is not obligatory for him to calculate Khums based on the increased price. Instead, when the time reaches, the Khums of the commodity in form of commodity itself is obligatory upon him whether its price rises up or falls down, he should pay the Khums at that time. For example, if a person buys a commodity with the money, for which he has already given the Khums, for 1000 Dollars, and during the year the price of the commodity raised up to 6000 Dollars, 1/6th of that commodity will be the Khums, and if he did not pay his Khums, and during the beginning of the following year price of that commodity rises furthermore, and then comes down, for example it reaches back to 1000 Dollars, he should pay the 1/6th of the price of that commodity, which is the current price of it. However, when the price of the commodity was on the rise, the commodity itself perishes, and later its market value falls down, and without any genuine reason he has delayed his Khums, he is the guarantor of the Khums since the rise of the price of that commodity till the day it perished.
1779. If a person possesses some goods other than merchandise, of which he has paid Khums or Khums is not paid for it, if its price shoots up, and he sells it, it will be considered as a profit and he should pay Khums on the excess gained if it exceeds his annual expenditure.
1780. If a person establishes an orchard, with the intention of selling it after its price goes up, he should pay Khums on the fruit, the growth of the trees and the increase in the price of the orchard. But, if he had established the orchard for himself and his family, if in certain circumstances they need it, it will be considered as their expenditure and there will be no Khums upon the orchard and its growth. If he establishes an orchard so that he can sell the fruits and he can use the earnings, it is considered as a wealth and it is obligatory upon him to pay Khums upon it. Since, before it becomes an orchard and its trees become full grown, if the land does not
account for Khums then he should pay Khums for the trees and later for the growth of the trees as well.
1781. If a person plants willow, plane tree and other trees like them, in the year in which it should be sold although he does not sell it, he should pay Khums on it. However, for example, if he uses the branches of the trees, which are cut every year, and the profit of these branches alone, or the same added with other profits made by him, which makes his annual income exceed his annual expenditure, he should pay Khums on it at the end of each year.
1782. If a person has few sources of income, for example, he receives rent for his property, is engaged in trading and farming, he should pay Khums at the end of the year from what exceeds his expenses. In addition, if he makes a profit from one source and sustains loss in the other, as per obligatory precaution, he should give the Khums of the one in which he gained profit. However, if he had two trading business he can compensate the loss of one with the profit of the other.
1783. The expenditure, which is incurred in making profit, for example, brokerage and transportation (as, neither the same thing nor any thing in exchange of it remains) is considered as the investment, although the Khums is not calculated on it, it can be deducted from the profit. In addition, it will not be considered as the profit.
1784. No Khums is payable on what one spends from his profit during the year on food, dress, furniture, purchase of house, marriage, dowry of daughter (if it is arranged in time as it is normally needed), Ziyarat and the likes of them provided that it is not beyond his status, and he has not been extravagant.
1785. Whatever a person spends on Nadhr and Kaffarah is a part of his annual expenditure. Similarly, what he gives away as a gift or a prize is included in his annual expenditure, provided it is not beyond his status.
1786. If a person lives in a city where people normally arrange some amount of the dowry for their daughter every year only if arranging it is a necessity. Therefore, if he purchases the dowry with the profit earned during the year, he should not give Khums on it, and if he spends the profit of one year to buy the dowry in the following year, he should pay its Khums.
1787. Whatever a person spends on his journey of Hajj and other Ziyarats (pilgrimages) is reckoned to be part of his expenditure of the year in which he started the journey, even though if his journey extends till a part of the next year.
1788. If a person who earns profit from his work and trade, has some other property on which Khums is not liable, he can calculate his expenditure for the year from the profit earned from his work or business.
1789. If a person purchases supplies for his use during the year, and at the end of the year a part of it remains unused, he should pay Khums on it. In addition, if he wants to pay its value, which may have increased since he brought the supplies, he should calculate the price prevailing at the end of the year.
1790. If a person purchases household accessories with the profit earned by him before paying Khums. If their needs cease to exist during the year, if it exceeds his annual expenditure, as per recommendation, he should give Khums on it. Likewise, for the ornaments of adornment of women. However, if the requirement ceases to exist in the following year then this recommendation is not considered.
1791. If a person does not make any profit during a year, he cannot deduct his expenditure of that year from the profit which he makes in the next year.
1792. If a person does not make any profit in the beginning of the year, and spends his capital, and then makes some profit before the year ends, he is allowed to deduct the amount spent from his capital, from the profit. However, as per recommendation, he should not deduct from it.
1793. If a part of a capital from one trade is reduced or lost due to a business deal without being at fault, and from the capital which is left earns a profit which exceeds his annual expenditure, he can deduct the lost amount from the profit made in the same year. However, as per recommendation, he should not deduct anything after it is deducted.
1794. If something other than the capital is lost from his wealth, he cannot procure it from the profit made by him. However, if he needs that thing during that very year, he can procure it from the profit.
1795. If a person borrows money in the beginning of the year to meet his expenses, and makes profit before the year ends, he can deduct the borrowed amount from his profit.
1796. If a person does not make any profit throughout a year, and borrows money to meet his expenses, he can deduct the borrowed amount from the profit made by him during the succeeding years.
1797. If a person borrows to increase his wealth or to purchase a property, which he does not need, he cannot deduct it from the profit. However, if the money borrowed or the thing which is purchased by the borrowed money ceases to exist he can pay it from the profit earned.
1798. A person can pay the Khums of a thing from itself, or he can also pay money equivalent to the value of the Khums for which he is liable. Most likely the commodity given itself as Khums is sufficient.
1799. Taking the responsibility of the Khums after it has been separated is not allowed without the permission of the Mujtahid.
1800. A person who owes Khums cannot take responsibility for it, i.e. treat himself to be the debtor of those entitled to receive it, and use the entire property, and if he uses that property and it is expended, he should pay Khums on it.
1801. If a person, who owes Khums makes an agreement with the Mujtahid, that he will take the responsibility of the Khums and later returns it. He can utilise the entire property of the Khums and the profit he earns from it after the agreement, belongs to him.
1802. If one partner pays Khums on the profit made by him, and the other partner does not pay it, and he (the other partner) offers in the next year, as share of his capital, the property on which Khums has not been paid, neither of them has the right to utilise that capital.
1803. If a minor child owns some capital, and earns profit from it. He can pay Khums before he becomes a major and if he does not pay the Khums after the end of the year, he cannot utilize it. In this case, it is obligatory on the minor child that after he becomes a major, he should pay its Khums.
1804. A person cannot utilize a property upon which he is certain that the Khums is not given. However, he can utilize a property upon which he is in doubt whether or not the Khums has been given.
1805. If a person, who has never paid Khums since he became liable, purchases a property, and its price goes up; in addition, if he had not purchased it with the intention that its price will inflate and then he will sell it, for example, if he had purchased a land for farming in case if he had purchased it from a credit and paid its price out of the money on which he had not paid Khums, he should pay Khums on the purchase price. However, if he has paid to the seller the money on which Khums has not been paid by him, and told him "I am purchasing this property with this money" in case if the Mujtahid allows the one fifth of the transaction the purchaser should pay Khums on the current value of that property.
1806. If a person who has never paid Khums since he became liable for it, purchases with the profit of his trade, something which is not needed by him, and a year passes since he made that profit, he should pay Khums on that thing. And if he purchases household equipment and other necessities, in accordance with his status, it is not necessary for him to pay Khums on them, if he knows that he purchased them during the year with the same year's profit. And if he does not know, he should, as per recommended precaution, make compromise with the Mujtahid.