Calculating if khums is applicable or not

[Azadar-e-Ali]

Salam 

Suppose a man has $10,000 at the end of a year which he considers as his savings for that year.

He pays khums on it and he is then left with $8000.

During the next year, he earns and also spends, regularly taking out and depositing money into his account.

At the end of this year he has only $6000 left in bank. Now there are two ways to look at this:

One way is that whatever he earned this year was used up for his expenses and he even had to take out $2000 from his last year's savings as well. If the man thinks like this, he would not have to pay any khums this year. 

The other way to look at this is that he used up the entire $8000 saved from last year, and this $6000 is the money which he has managed to save from this year's salaries. In this case, he would have to pay khums which would be equal to $1200.

Now my question is that is it permissible for a person to choose whichever of these two ways of thinking that he likes? There is a difference of $1200 between the two types of thinking. How does one ensure that his thinking is correct or which option he is required to choose from? 

If khums is wajib on him, then selecting the option for no khums would be a great sin and very problematic, and if khums is not wajib on him but he chooses the option to pay khums, then he might be rewarded by Allah for giving khums when it was not even wajib, but at the same time he would be using up his valuable resources which his own family might need more than others. 

So how does a man decide which option to select ? 

[Ashvazdanghe]

Salam he must pay $1200 because Khums applies to your remaining saving after one year & Allah promised that everyone that pays charity & his Khums won’t face poverty.

[Azadar-e-Ali]

Thanks for your reply. 

52 minutes ago, Ashvazdanghe said:

Khums applies to your remaining saving after one year

Yes, only for one year. It doesn't apply to your savings from previous year in which you have already paid khums. You don't have to pay khums twice or thrice on a certain amount of money. That is my question ... If you have some money at the end of the year, and if you consider that it is the money you saved from last year, then there will be no khums. But if you consider that money from this year's savings then there will be khums. Do you get my point ? 

[Ashvazdanghe]

Salam if remaining saving is just from money that paid it’s Khums last year you must not pay Khums from it again.

no.8 مخمس that it’s name is Mukhamas 

http://Farsi.Khamenei.ir/treatise-content?id=223

https://www.yjc.ir/fa/news/5762991/10-نکته-مهم-برای-محاسبه-خمس

Edited March 4, 2020 by Ashvazdanghe

[baqar]

20 hours ago, Azadar-e-Ali said:

Suppose a man has $10,000 at the end of a year which he considers as his savings for that year.

He pays khums on it and he is then left with $8000.

During the next year, he earns and also spends, regularly taking out and depositing money into his account.

There is only one way of calculating Khums. The first thing you do is to fix a date for the calculation. And you do the calculation every year on the same date.

If you have lost money, there will be no Khums payable.

If I have understood you correctly, you had $ 8,000 at the end of the first year and $ 6,000 at the end of the second year.

So in the space of one year, you have lost $ 2,000. Right?

Since you have lost money, no Khums is payable.

Edited March 5, 2020 by baqar

[Azadar-e-Ali]

Thanks for your answer but I believe it is more complicated than that. What you are mentioning is one of the methods to calculate khums, but there is another case in which case khums becomes obligatory. I can explain the two cases here: 

First case: 

Suppose at the end of 2018, I am left with $8000 after paying khums. This $8000 is now "khums-paid" money. Suppose I save this $8000 in a bank and don’t touch it during 2019. I keep this money safe and don’t use it. 

Now during 2019, I earn money from my salary and whatever I earn, all of it is spent on my expenses. I'm not able to save more money this year out of my salary. In fact, my salary is not enough for my expenses, so I have to take out $2000 from my bank. So when 2019 ends, I have only $6000 left in my bank.  This money is already "khums-paid" so I don't have to pay any khums at the end of 2019.

Second case:

At the end of 2018, I have $8000 left with me after paying khums. I keep this money at home and start using it during 2019. I use all of this $8000 within few months. After that I start using my salary for my expenses. By the end of 2019, all of $8000 is used but I have managed to save another $6000 from my salary in 2019. Now this $6000 is new money and I will have to pay khums on it, which will be $1200. 

Now my original question was that if I don't keep the $8000 in bank and just mix it with new salary from 2019, and at the end of 2019 I have $6000, how would I know whether this amount is part of the original $8000 (on which there will be no khums), or part of the new salary (on which there will be khums)? How do I make the decision about which option to select ? 

[habib e najjaar]

Sayyid Sistani :Ruling 1803. If a person does not make a profit at the end of a year and borrows money in order to meet his living expenses, he cannot deduct the borrowed amount from the profit made by him in succeeding years and thereby not pay khums on the profit. However, if he borrows money during the year in order to meet his living expenses and he makes a profit before the year’s end, he can deduct the borrowed amount from his profit. Similarly, in the first case, he can repay the borrowed amount from gains made during the year and that amount is not liable for khums.

[Azadar-e-Ali]

Thanks, but this rule doesn't apply to the case I mentioned because this rule is about how to calculate khums after borrowing money. I didn't say that I had borrowed any money from anyone. Thanks anyway for information. 

[baqar]

On 3/5/2020 at 5:17 PM, Azadar-e-Ali said:

Now my original question was that if I don't keep the $8000 in bank and just mix it with new salary from 2019, and at the end of 2019 I have $6000, how would I know whether this amount is part of the original $8000 (on which there will be no khums), or part of the new salary (on which there will be khums)? How do I make the decision about which option to select ?

It does not matter whether you put the money in the bank OR you mix it with something else.

The rule, as I have indicated before, is as follows:

Suppose the total at the beginning of the Khums year    =   x1

And the total at the end of the Khums  year                     =  x2

If x2 <= x1, then no Khums is payable.

But if x2 > x1, Khums is payable and is calculating by the formula

Khums =  (x2 - x1) / 5  

Simple !

[Azadar-e-Ali]

Thanks for your reply but I believe your calculation is quite incorrect. Your calculation is ignoring the fact that to determine khums, you first have to know how much money you have on which you have already paid khums and how much "new" money you have from this year on which khums is applicable. 

I will give an example:

If you have $10,000 at the end of first year and you pay khums on it..you will be left with $8000. Now this $8000 is "khums-paid" money. You will have to keep this in mind. 

Now at the end of second year ...you still have $8000. You now have to determine whether this is the same "khums-paid" money from last year which you have not touched at all....or whether it is "new" $8000 which you have earned in the second year. 

If it is the same old "khums-paid" money from last year, then there will be no khums this year because the rule is that you have to pay khums only once on a particular amount. 

But if it is "new" $8000 (this year's profit)then yes, you have to pay khums on it. 

But your calculation is ignoring this very important concept of "khums-paid" and "khums-unpaid" money.  It will be a problem if one uses his khums paid money, then earns some profit in the next year and doesnt pay khums on this new profit because it is less than the profit of last year. I hope it clarifies the issue. 

 

Edited March 8, 2020 by Azadar-e-Ali

[Azadar-e-Ali]

14 hours ago, baqar said:

It does not matter whether you put the money in the bank OR you mix it with something else.

I know it doesn't matter, but people often use different bank accounts for money on which they have paid khums so that khums-paid money doesn't get mixed with new year's profit. If it gets mixed, then it will be a problem at the end of the year because you will not know how much money you have which is khums-paid and how much new profit you have on which khums is due. 

[baqar]

10 hours ago, Azadar-e-Ali said:

Now at the end of second year ...you still have $8000. You now have to determine whether this is the same "khums-paid" money from last year which you have not touched at all....or whether it is "new" $8000 which you have earned in the second year. 

 

10 hours ago, Azadar-e-Ali said:

I know it doesn't matter, but people often use different bank accounts for money on which they have paid khums so that khums-paid money doesn't get mixed with new year's profit.

Brother, I am sorry to say that I don't share your understanding of Khums.

It would be best if you contact some scholars and discuss the matter with them.  

All the best

[Nadeemsayyed110]

If earning exceeds the annual expense then only one pays the khums 

In your scenario 

Earned - 10000

Already paid khums money - 8000

Expense - 12000

Even If you use 8000 already paid khums money and 4000 from the newly earned money. Total expense is still 12000 for that year which is greater than 10000 you earned. 

Hence no khums. 

 

 

 

 

 

 

[Azadar-e-Ali]

Brother, thanks but I think you should also read your marjas rules because I am quite clear in my mind that your calculation is not right. I guarantee you that it is not a matter of simple substraction of one year's profit from last year's profit like you stated. I'm afraid if people use this calculation to determine their khums, they are likely to conclude that no khums is applicable on them, whereas in reality khums would be wajib on them. 

I will inshaAllah myself paste rules of Syed Sistani here which will clarify that khums calculation is based not on profit at the end of year, but on how much money is " khums-paid " from last year and how much is " new money " earned in the current year. 

If you don't know the amounts of these two types of money that you have at the end of year, then your khums calculation will be incorrect. 

Edited March 9, 2020 by Azadar-e-Ali

[baqar]

These might help.

https://www.al-Islam.org/a-summary-of-rulings-makarim-shirazi/rules-khums

[baqar]

And this

https://www.Sistani.org/english/qa/01234/

[baqar]

At the bottom of Ayatullah  Sistani's site, it says

"Click here to post a new question."

Here is your opportunity to ask him your question.

I would suggest NOT to write your question directly but to write it first on a piece of paper and then read it and revise it, changing it as often as necessary, to make it as clear as possible.  

Transfer it to the website only when you are satisfied that the question is very clear.  

 

[Azadar-e-Ali]

Thanks.

Issue 624: All properties on which the Khums has been taken once, payment of Khums another time is not connected to it, except if it incurs growth or it increases in value.

----

The above issue clarifies that the calculation you mentioned of simple substraction of one year's profit from previous year is invalid because it doesn't take into account property on which khums has already been paid or not. I hope you understand. 

 

[baqar]

3 minutes ago, Azadar-e-Ali said:

Thanks.

Issue 624: All properties on which the Khums has been taken once, payment of Khums another time is not connected to it, except if it incurs growth or it increases in value.

----

The above issue clarifies that the calculation you mentioned of simple substraction of one year's profit from previous year is invalid because it doesn't take into account property on which khums has already been paid or not. I hope you understand. 

 

Brother, you misunderstood my post.

I NEVER said that you subtract one year's profit from the previous year.

But it will be BEST if you ask Ayatullah Siatani the question in the website I have given you above.

Once again, here it is:

https://www.Sistani.org/english/qa/01234/    

[Azadar-e-Ali]

Let me try one more time to explain it to you, and if you don't understand it, then pls tell me which part of it you don't understand. 

--------

At the end of first year, you have $10,000. You pay khums on it which is $2000. Now you have $8000 left with you. 

You spend all of this $8000 to buy a new car. 

Then in the second year, you get your salaries every month out of which you pay your expenses. At the end of second year, you have $8000. 

Your calculation (incorrect)

(Second year profit - first year profit)

$8000 - $8000 = 0 khums 

True calculation 

Second year profit = $8000

Khums paid money from last year = $0 ( you used all of it to buy car) 

$8000 - 0 = $8000

khums applicable this year 8000 x 0.2 = $1600

---------

Your calculation is making an error of $1600 khums which you think is not applicable but in truth it is. Hope this clarifies. 

[baqar]

I did not say that you subtract this year's profit from last year's.

You have misunderstood my calculation.

x2 and x1 in my calculation are NOT profits.

They are the total sum of money I have on the two dates.

Brother, I have paid Khums ALL my life and I know that my calculation is correct.

But let us not  waste your time and my time unnecessarily.

Read my last few posts and ask the question of Ayatullah Sistani, as I have suggested. 

Edited March 10, 2020 by baqar

[Azadar-e-Ali]

1 minute ago, baqar said:

They are the total sum of money I have on two dates

Brother, I have also paid khums all my life. Whether you use Total sum or profit, the calculation you mentioned ignores the basic concept of "property on which khums has been paid". 

This concept is mentioned in the rule I posted. 

Pls can you tell which part of the calculations I posted you do not understand or do not agree with? But if you are no longer interested, then that's fine with me. 

[baqar]

OK

Answer me the following questions:

(1) How much money did the person earn in the first year ?

(2) How much did he spend in the first year out of his earnings?

(3) How much money did the person earn in the second year ? 

(4)How much did he spend in the second year out of his earnings?

(5) How much money did he have at the beginning of the first year?  

Edited March 10, 2020 by baqar

[baqar]

How much time do you need to answer five simple questions?

I just asked you five simple questions, brother.

 

[Azadar-e-Ali]

Thanks for your questions. 

5 minutes ago, baqar said:

(1) How much money did the person earn in the first year ?

Suppose $20,000 

6 minutes ago, baqar said:

(2) How much did he spend in the first year out of his earnings?

$10,000

7 minutes ago, baqar said:

(3) How much money did the person earn in the second year ? 

$20,000 

8 minutes ago, baqar said:

(4)How much did he spend in the second year out of his earnings?

He spent $8000 in second year from the money saved from first year 

13 minutes ago, baqar said:

(5) How much money did he have at the beginning of the first year?  

$0

Pls tell me how much khums you would think this man should pay, as per your calculation at the end of first year and at the end of second year?

[Azadar-e-Ali]

16 minutes ago, baqar said:

How much time do you need to answer five simple questions?

I just asked you five simple questions, brother.

 

I have answered... You can take your time. 

[baqar]

OK 

Let us first calculate the Khums for the first year.

You say that he has nothing to begin with. 

So total at the beginning of the first year x1 = 0

He earned $ 20,000 in the first year and spent $ 10,000 out of it,

So at the end of the first year, he has 20, 000 - $ 10,000, that is $ 10,000.

Therefore total at the end of the first year  x2 = 10,000

Therefore Khums for the first year = (x2 - x1) / 5 = (20,000 - 10,000) / 5

                                                                             =  10, 000 / 5

                                                                             =   2,000
The total at the end of the first year has been calculated as $ 10,000 and this will also be the total at the beginning of the second year.

Agreed so far,  I hope?

If you don't agree, please let me know 

@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

Now let us calculate Khums for the second year

Total at the beginning of the second year as established above is $ 10,000.

Therefore x1 = 10,000

The person earned $ 20,000 in the second year and spent $ 8,000.
So at the end of the second year, he has $ 10,000 + $ 20,000 - $ 8,000  =

                                                                  $ 22,000

Therefore x2 = 22,000

Khums for the second year = (x2 - x1) / 5
                                            = (22,000 - 10,000) / 5

                                             = 12,000 / 5

                                             = 2,400
That is how the standard calculation is done.

Your point about spending $ 8,000 from his earning of the first year is not meaningful in the calculation of Khums.   

Whether he spends it from earnings of the first year or the second year is meaningless.

It is the same money. 

If you don't agree, I am sorry I will not be able to  help you with the problem.

You can send your question to Ayatullah Sistani with the same figures you have given me and see what he says.

https://www.Sistani.org/english/qa/01234/

Khuda Hafiz

Edited March 10, 2020 by baqar

[Nadeemsayyed110]

6 hours ago, Azadar-e-Ali said:

Brother, thanks but I think you should also read your marjas rules because I am quite clear in my mind that your calculation is not right. I guarantee you that it is not a matter of simple substraction of one year's profit from last year's profit like you stated. I'm afraid if people use this calculation to determine their khums, they are likely to conclude that no khums is applicable on them, whereas in reality khums would be wajib on them. 

I will inshaAllah myself paste rules of Syed Sistani here which will clarify that khums calculation is based not on profit at the end of year, but on how much money is " khums-paid " from last year and how much is " new money " earned in the current year. 

If you don't know the amounts of these two types of money that you have at the end of year, then your khums calculation will be incorrect. 

The ruling shared by you to support your view is for property. Can you share any ruling which says the paak money should be excluded from the khums calculation? 

[Guest]

@Azadar-e-Ali

Do this,

1. Calculate your total earnings for the second year.

2. Calculate your total expenses for the second year.

if expenses were more than earning then no khums payable.

if earnings were more on expenses then pay khums on the balance.

(If your expenses were more than your earnings then it means you took out money from your savings of previous year(8000) which was already khums paid).

[Azadar-e-Ali]

6 hours ago, baqar said:

The total at the end of the first year has been calculated as $ 10,000 and this will also be the total at the beginning of the second year.

Why 10,000? What happend to the 2000 that he had paid as khums at the end of first year? The total at the beginning of second year is 10,000 - 2000 = 8000. 

 

6 hours ago, baqar said:

at the end of the second year, he has $ 10,000 + $ 20,000 - $ 8,000  =

Where is the $2000 khums ? 

Edited March 10, 2020 by Azadar-e-Ali

[Ashvazdanghe]

28 minutes ago, Azadar-e-Ali said:

Where is the $2000 khums ?

Salam amount of paid khums at first years doesn't enter to calculation of second year.

[Azadar-e-Ali]

29 minutes ago, Ashvazdanghe said:

Salam amount of paid khums at first years doesn't enter to calculation of second year.

Wa'salam. Ofcourse, it doesn't. That's why amount at the start of second year is 8000, not 10,000. The 2000 doesn't enter into calculation. 

[baqar]

3 hours ago, Azadar-e-Ali said:

Why 10,000? What happend to the 2000 that he had paid as khums at the end of first year? The total at the beginning of second year is 10,000 - 2000 = 8000. Where is the $2000 khums ? 

I asked you the question "How much did he spend in the first year out of his earnings?"

And you said $ 10,000.

When I asked that question, I included KHUMS,

That is why I have NOT treated KHUMS separately. 

Because KHUMS is ALSO an expense and therefore is included in his TOTAL EXPENDITURE of $ 10,000.

@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

However, if you want to treat KHUMS separately, that is no problem.

You will get the SAME result. 

Total at the beginning of the second year as established above is $ 10,000 - $ 2,000 = $ 8,000.

Therefore x1 = 8,000

The person earned $ 20,000 in the second year and spent $ 8,000.
So at the end of the second year, he has $ 8,000 + $ 20,000 - $ 8,000  =

                                                                  $ 20,000

Therefore x2 = 20,000

Khums for the second year = (x2 - x1) / 5
                                            = (20,000 - 8,000) / 5

                                             = 12,000 / 5

                                             = 2,400

The answer happens to be the same as last time.

Khuda Hafiz

Edited March 10, 2020 by baqar

[Azadar-e-Ali]

19 hours ago, baqar said:

Your point about spending $ 8,000 from his earning of the first year is not meaningful in the calculation of Khums.   

Whether he spends it from earnings of the first year or the second year is meaningless.

It is the same money. 

The root problem is in this statement because you are not giving any consideration to the fact that a man can have two types of money at any one point in time, one on which khums has been paid, and other on which khums has never been paid. This very important differentiation is highlighted several times in the rulings such as....

Ruling 1777. If a person purchases something with the "actual" money on which khums has not been paid, I.e. he tells the seller that he is purchasing the item with that money,(5) then, in the event that the seller is a Twelver (Ithnā ʿAsharī) Shia, the entire transaction (muʿāmalah) is valid (ṣaḥīḥ), and the item that has been purchased with the money is liable for khums; and there is no need to get authorisation or approval from a fully qualified jurist (al-ḥākim al-sharʿī).

Ruling 1778. If a person purchases something and after agreeing the transaction he pays for it with money on which khums has not been paid,(6) the transaction is valid but he will be indebted to those entitled (mustaḥiqqūn) to receive khums for the khums on the money he paid to the seller.

---------------

The above rules of Ayatollah Sistani confirm that a man can have two types of ACTUAL money (khums-paid and khums-unpaid). But your entire calculations give no consideration to this very important differentiation and you seem to mix both of them together without knowing which money is khums-paid and which is not.

19 hours ago, baqar said:

Whether he spends it from earnings of the first year or the second year is meaningless.

It is the same money. 

The above rules of Ayatollah Sistani confirm it is NOT THE SAME MONEY. 

infact your own calculations become meaningless because they make no difference between ACTUAL money on which khums has been paid and the ACTUAL money on which khums has not been paid. 

If a person doesnt agree with this differentiation of actual money into two different types, then his khums calculation at the year end may be faulty, because he will have no idea which expenses he paid with actual khums-paid money and which expenses he paid with khums-unpaid money. He could end up calculating his khums as much less than what is really due on him.

Edited March 10, 2020 by Azadar-e-Ali

[baqar]

10 minutes ago, Azadar-e-Ali said:

The root problem is in this statement because you are not giving any consideration to the fact that a man can have two types of money at any one point in time, one in which khums has been paid, and other on which khums has never been paid.

There is NO such thing as TWO types of money.

If you have seen such a ruling, I am pretty sure it is a translation (or interpretation) problem. 

15 minutes ago, Azadar-e-Ali said:

If you don't agree with this differentiation of actual money into two different types, then your khums calculation at the year end will be faulty, because you had no idea which expenses you paid with actual khums-paid money and which expenses you paid with khums-unpaid money. 

That is plain nonsense.

But as I said before, you can check with Ayatullah Sistani and see what he says.

https://www.Sistani.org/english/qa/01234/

Khuda Hafiz again