Is there Zakat on money given to the travel agent?
A person has paid a few thousand pounds upfront for Hajj this year, and his Zakah anniversary comes in Ramaḍān. Is Zakat due on that amount?
بسم الله الرحمن الرحیم
If the transaction (offer and acceptance) is completed before the Zakat anniversary, there is no Zakat due on the total cost, including the upfront money and the balance.
However, if the transaction is cancelled before the Zakat anniversary, Zakat will be due on the refunded or expected refund amount. If the transaction is cancelled after the Zakat anniversary, Zakat will not be due on the refunded amount.
Allah knows best
26 Rajab 1440 / 1 April 2019
Note: Some colleagues have queried what is mentioned in Fiqh books that in Ijārah the remuneration only becomes necessary once the service begins, not merely by the offer and acceptance. Therefore, in the aforementioned scenario, Zakat should be necessary irrespective because the debt is not established until the renumeration becomes necessary.
قال السمرقندي في تحفة الفقهاء (٢/٣٤٧): وليس له أن يحبس المستأجر لاستيفاء الأجرة كما في باب البيع، لأن الأجرة لا تجب بنفس العقد عندنا، لكون المعقود عليه وهو المنافع معدومة، انتهى.
In traditional Ijārah services, it was true that the remuneration would not become necessary just by the transaction. For example, someone undertook a transaction with a painter, the remuneration would only become necessary upon starting the work. However, nowadays, the ijārah and service contracts becoming binding upon transaction, and monies are also often taken in advance, and where not taken, can be enforced by courts, even if one does not use the service. So, the remuneration becomes necessary upon completion of the transaction, and thereby, the debt is established.