AsSalamu Alikum, 1. Is zakat due on shares profits or its current market value? my intention is for long time saving and I recieve dividents from it. 2. I am investing my 401K in Amana Growth Fund (all of it are stock and shares in companies work in halal business). I don't recive dividents (the dividents are re-invested in the fund automatically) from it and I want it for my retirement What is the zakat rule in this stiuation?. Note: If I withdraw my 401K there is a 25% tax and may be a penalty also. 3. If I don't have money in both cases above to pay zakat, what should I do? Is this considered debt (Dein)? if I died before paying the zakat (in case no money is available), is my family are responsible for paying zakat on my behave?

Alhamdu Lillah

1- For the long term savings plan, Zakah on stocks or shares is due only on the dividend or the profit. It takes the rule of having any exploited assets, like a laboratory or a house for rent or a taxi cab.

2- For any pension plan, 401(K) or the like, you need to pay Zakah annually on the withdrawable amount after deducting all prescribed penalties and taxes and administrative fees. It is to be noted that you do not have to actually withdraw the money to be Zakatable, rather it is enough for the money to be withdrawable (even with penalty) to be subject to Zakah.

3- In case of lacking money to pay the due Zakah, the due amount becomes a debt that you owe Allah SWT, and it has to be paid in full ASAP. It is required to document these debts in your last will and mandate that the due Zakah gets deducted from your estate before distributing the wealth on your legal heirs. When Allah SWT legislated the inheritance law in the Quran, He said, what means (..after deducting the will or the debt). This means the donation indicated in the last will and the debt should come first before the distribution of the wealth. Obviously, Allah’s debt has a priority over other debts.