Zakaat On Old Stock

If you are indebted to the extent that your debts exceed the value of your (total) assets, then you are exempted from paying Zakaat. For example, if your Zakaatable assets such as business merchandise, investments, cash, gold, silver, etc. is worth R1 million, but you are indebted to the merchants for an amount of R1.2 million, then you will be exempted from Zakaat as your debts exceed your Zakaatable assets.

However, if all your Zakaatable assets are valued at R2 million whilst your debts add to R1.2 million, then you are required to pay Zakaat on the remaining R800 000.00.

Now coming to your query pertaining to old stock, all goods purchased with the intention of resale are Zakaatable even though some goods may be old and referred to as ‘dead stock’ or stock that is redundant, as it still forms part of your goods of merchandise and is available on your shelves (for resale). In simple terms, such stock also forms part of your Zakaatable assets. This is what was possibly meant that Zakaat is payable on ‘old stock.’ So whatever its market value may be (it could be even less than your cost price due to it being dead stock), you should add that value to your Zakaatable assets and then deduct your liabilities (current debts, etc.) before you evaluate whether you are liable to pay Zakaat on your total Zakaatable assets or not.