Zaka'h on Investments and Assets in Personal Use... Do we need to pay Zak'ah on 401(K), IRA's account, and Stocks, because their value keep changing how we make an assessment. Somebody told me to fix a day in Ramadan and on that particular day what ever is value of your accounts use that amount to pay your Zak'ah . This argument appeals to me. Regarding jewelry, some people say if its in use you don't need to pay Zak'ah ? Do you have to pay Zaka'h for your car, boat etc? Jazak Allah Wasalam Mansoor Awan Reply Answers to your questions follow: As a principle, Zaka'h is levied both on savings as well as investments. However, the application of Zaka'h in the two cases is different. In the case of savings, the total savings shall be included in the total Zaka'table wealth of a person, of which 2.5% is to paid as Zaka'h . In the case of Investments, on the other hand, 10% of the total output of this investment (return on investment) is to be paid as Zaka'h [1] . Keeping this principle in perspective, we may now turn to your specific questions. Purchase of stocks is clearly an investment and, therefore, Zaka'h on stocks should apply at 10% of the output (return on investment) of these stocks. The amount of investment in stocks would be exempt from Zaka'h , as all investments are. However, the categorization of retirement plans (like IRA 401K), on the other hand, is not as simple. It seems to be a combination of savings as well as investments. I would suggest that in such schemes, Zaka'h should apply at 2.5% of the accumulated total amount contributed by the employee to date, for the period during which the plan is running. At the end of the plan, when the employee receives the total amount (own contribution + employer's contribution + any accumulated returns), the amount which is over and above the employee's own contribution should be considered as return on investments and Zaka'h should apply on this return on investment at 10% of the total return on investment. All assets which are in one's regular personal or business usage are exempt from Zaka'h . This is precisely the principle why Zaka'h does not apply to the total amount of investment.