Second Question
The Year with Regard to Profit on Capital

The jurists differ on how the lunar year (ḥawl) is calculated for profit earned on capital, forming three opinions:

1. Al-Shāfiʿī holds that the year is counted from the very day the profit is realized, whether or not the principal itself amounts to a niṣāb. A similar practice is related from ʿUmar b. ʿAbd al-ʿAzīz, who wrote that the profits of trade are not to be subjected to zakāt until an entire year has elapsed over them.

2. Mālik maintains that the profit shares the year of the principal: once the principal completes its year, zakāt is paid on the profit together with it—whether the principal alone reaches the niṣāb or is below it, so long as the principal together with its profit reaches the niṣāb. Abū ʿUbayd observes that no jurist supported Mālik on this point except Mālik’s own students.

3. A third group distinguishes between a principal that, after a year, constitutes a niṣāb and one that does not. They state: if the principal is a niṣāb, the profit is taxed along with it; if it is not, no zakāt is due. This opinion is reported from al-Awzāʿī, Abū Thawr, and Abū Ḥanīfah.

Reason for the divergence
The disagreement turns on whether profit should be treated as newly acquired wealth or as an extension of the principal. Whoever likens it to new wealth says a fresh year must be started for it. Whoever likens it to the principal rules that it follows the principal—on condition that zakāt is already obligatory on the principal, which is only the case when the principal itself is a niṣāb. For this reason the analogy of profit to principal is considered weak within the Mālikī school. It appears that what Mālik—may Allah be pleased with him—relied upon here was the comparison of profit to the offspring of livestock, yet the ruling on newborn animals is itself disputed, and a report from Mālik concurs with the majority view.

Third Question
The Year with Regard to Returns (al-Fawāʾid)

The jurists unanimously agree that when one’s wealth is below a niṣāb and additional wealth—other than profit on that same capital—is acquired so that the combined amount reaches a niṣāb, the year is counted from the day the total first completes the niṣāb.

They differ, however, when someone acquires new wealth while already possessing a separate niṣāb on which a full year has elapsed:

• Mālik holds that the newly acquired wealth, if itself a niṣāb, is taxed for its own year and is not combined with the wealth on which zakāt has already fallen due; al-Shāfiʿī takes the same position regarding returns.

• Abū Ḥanīfah, his associates, and al-Thawrī maintain that all returns are assessed according to the year of the principal, provided the principal is a niṣāb; they apply the same ruling to profit.

Reason for the divergence
The disagreement hinges on whether the returns are to be regarded as wealth added to an existing taxable fund or as an independent fund. Those who see them as independent say that no zakāt is due on the returns. Those who regard them as part of the original wealth—viewing the two as a single asset—say that if the original wealth is zakāt-liable by virtue of being a niṣāb, the returns share its year.