Zakat in a mudaraba partnership

Question

There is a business in which there are three partners, in such a way that the money belongs to one man and from the rest there is only labour, and the profit is equal. For example, the annual profit was three thousand, and the original sum was forty thousand. The other partners will pay zakat on their profit of one thousand each. Now, will the one whose original sum it is pay zakat on forty-one thousand, or only on the one thousand of profit?

Answer

This is a case of mudaraba (a partnership in which one party provides the capital and the other the labour). Zakat becomes wajib on the sum of the original property and the profit together. The person whose capital (ra’s al-mal) is forty thousand and who received one thousand as profit is obliged to pay zakat on forty-one thousand.

Source: Fatawa Mahmudiyya

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