Title: Zaka'h on Shares and Investments Question: I have some shares that have diminished in value since I purchased them. Will I calculate Zaka'h on the original purchase price or at the current value or at the market value at the day Zaka'h is being calculated or at the average market price during the year (average price is difficult to arrive at, I take the highest price and lowest price during the year and divide it by 2)? I do not want to sell these shares, as I will have to book a substantial loss. Moreover, I have some loan on me. What will be its treatment? Answer: Shares, in fact, are a part of a person's invested capital. In my opinion, investments - including investments in shares - should not be treated as idle wealth [1] . On the contrary, I consider it more appropriate to treat them as one's (capital) investments in a business. As far as Zaka'h on business investments is concerned, in my opinion, Zaka'h is calculated not on the total value of such investments, but on the production (returns) of these investments. If the production (return) is gained by an input of a combination of labor and capital [2] , then Zaka'h will be assessed at 5% of the total returns. If, on the other hand, the production (return) is gained through an input of either only labor or only capital [3] , the Zaka'h will be assessed at 10% of the total returns. Keeping the foregoing explanation in perspective, it should be clear that, in my opinion, irrespective of the rise or fall in value of the shares, Zaka'h on shares should be calculated at 10% of the total returns (dividends) earned on these shares. As far as the loan is concerned, no Zaka'h shall be paid on it. This really implies that while calculating Zaka'h on the total wealth (at the rate of 2.5% of the total wealth), the amount of the loan shall not be included in the total wealth of the individual. I hope this helps. 25 th November 1998 [1] Zaka'h on idle wealth should be calculated at the rate of 2.5% of the total wealth. [2] As is the case in industrial production, in general. [3] As is the case in consultancy services (of doctors, engineers, lawyers etc.) in which return is earned basically on the services provided (labor) or the case of investment in shares in which the person earns a return on an investment of capital only.