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Al-Khums, how to estimate its value

By: Bayynat editor

The Khums is a financial duty that is carried out with the intention of attaining a status closer to God-Qurbah. In comparison to zakat, it is obligatory on all possessions except the woman’s dowry and any expected inheritance. The term khums is derived from the ratio one in five (20%). In the following section, we are going to explain the conditions that make the khums obligatory and some of its general rulings in accordance to the view of His Eminence, Sayyed Muhammad Hussein Fadlullah (ra), as mentioned in Islamic Rulings, a Guide of Islamic Practices:

The following conditions must exist for the Khums to be applicable:

First and second: Bulough and sanity: Khums is not obligatory on the possessions of young children until they become neither of age, nor on the possessions of the insane person until he becomes sane if his insanity is constant. However, if his insanity strikes him only sporadically, knows becomes obligatory on him; the last ruling also applies to the person who repeatedly falls unconscious. That said, an exception to this is the young child’s possession of money mixed with unlawful money, in which case the guardian has to pay its khums even if before he reaches puberty.

Third: khums is not obligatory on the non-Muslim during the period when he is a non-Muslim, except if a non-Muslims buys land from a Muslim; he has to pay khums on it.

Fourth: in some possessions, such as treasures and minerals, not others.

Fifth: khums is not obligatory on possessions owned by a party such as the state, institutions, the mosque… Khums is obligatory on possessions owned by a person even if it owned by many persons.

It is not conditional for the khums to be applicable that the possession is present with the owner, the only thing here is that the owner of a possession that he expects to have returned to him has the choice between paying him khums when the possession is still not with him and waiting until he gets it back. However, khums is not obligatory on possessions that are unlikely to return to its owner unless they do return to him, in which case the khums becomes obligatory.

Estimating the khums:

If the condition for khums exist, it becomes obligatory on the person to pay the khums as its specified time without delay, but since the external elements in the khums differ according to whether the asset in money or goods, and according to their purpose being for business or possession, and according to whether a person owns them as money or loan, the estimation and calculation of the khums differs for three different cases:

First: if the asset to be taxed for the khums is money or assets and the person wants to pay the hums from the money of the asset itself, not from something different, and here the parts of the asset are of equal value, a person may pay its khums without any problem; but if their parts are different, it is not sufficient to pay the lower-valued part only, so he must check the difference in value and pay the amount equal to the khums of the total from the same asset or a different one.

Second: if the person wants to pay the khums from another asset, here he must estimate these assets at their current value and pay its khums, even if their current value is less than the purchase cost, although it is better to pay khums according to the purchase value. The same ruling applies to business assets.

That said, if he borrowed money and bought a car, for example, for possession, regardless to whether it was for the maintenance of his business, then he started paying it back from the profits of the following years, in this case after he had paid all the loan, and if the khums was applicable to it, he is not obliged to pay the khums of the increase over the purchase price paid by the money he borrowed before. However, if selling it were to make profit and its market value increased, the khums on the increase will be obligatory.

Third: if the assets he were brought with money from the profits of the previous year that were khums-applicable but he did not pay the khums, in this case, he must pay khums on the money only. So, if he bought a house using saved money which was khums applicable, in this case, regardless to its current or past value, he must pay the khums on the same price he paid when he bought the house, unless the house was bought to make a profit, in which case he must pay khums on the price and pay khums on the increase in the value, treating it as a business capital as previously explained.

If the person doubts whether the asset, which has been in his possession for one year, was bought using saved money so that he estimates its khums according to the purchase price, or if it was bought using profits of the purchase year so that he estimates its khums according to its current value, in this case he must estimate the khums according to its current value.