and by the close of day he has already earned on it and sold it. Trade goods, therefore, encompass everything a person acquires for the purpose of commerce, and such merchandise is subject to zakah.

The procedure is as follows: when your zakah falls due, you appraise all the trade goods in your possession and pay one quarter of one tenth of their market value—even if you purchased an item only recently.

Suppose your zakah date is in Rajab and you buy a commodity in Rabiʿ. When Rajab arrives, you must estimate what that commodity is worth at that moment and pay zakah on that amount. If you say, “But I have not kept it for a full year,” we reply: the passage of a year is not a condition for trade goods. What matters is their value, and that value has been with you for a year. Therefore, you assess them at their market price when zakah becomes obligatory, whether that price is higher or lower than what you paid.

Thus, if you bought it for 10,000 riyals and, when zakah is due, its value is 8,000, zakah is calculated on 8,000. If you bought it for 8,000 and it is now worth 10,000, zakah is calculated on 10,000. If you are unsure whether you will profit or not, the reference point is the capital you invested—so base the calculation on your capital.

Disbursement of zakah: it must be given only to those whom Allah has specified in His wisdom:
“Zakah expenditures are only for the poor, the destitute, those employed to collect it, those whose hearts are to be reconciled, to free captives, for those in debt, for the cause of Allah, and for the traveller—an obligation imposed by Allah” (al-Tawbah 9:60). That is to say, it must