Zakat on Umrah, Hajj and travel refunds

Zakat on ʿUmrah, Hajj and travel refunds

Question

There are many different scenarios in relation to ʿUmrah and Hajj and other travel refunds in light of Covid-19 and the Zakat implications on customers. A few scenarios are outlined here assuming that the Zakat anniversary is 1^st Ramadan and the full payment has been made:

1. A booking is cancelled after 1^st
2. A booking is cancelled and a full refund is received before 1^st
3. A booking is cancelled before 1^st Ramadan and the customer is immediately guaranteed a full monetary refund which is to be received after 1^st
4. A booking is cancelled before 1^st Ramadan, however, the customer is unsure whether he will be able to recover any refund.
5. A booking is cancelled and the customer receives a voucher or credit note before 1^st The voucher enables the person to travel with the airline or travel agent in the future and he is content with this.
6. A booking is cancelled before 1^st Ramadan and the customer is told they will either get a monetary refund or a voucher for another booking in the future. A monetary refund is not guaranteed.
7. A booking is cancelled before 1^st The travel agent promises the airline ticket refund in cash; however, they rule out any refund for the other costs. They agree to issue a voucher for the other costs.

Two scenarios are now outlined assuming that the Zakat anniversary is 1^st Ramadan and the payment was not made by the customer:

1. The booking is cancelled before 1^st
2. The booking is cancelled after 1^st

In all the aforementioned scenarios, the cancellation could be initiated by the client or the travel agent.

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بسم الله الرحمن الرحیم

Answer

The following are the key principles of Zakat which apply to the scenarios in question:

• Zakat is due on all Zakatable assets owned by a person on their Zakat anniversary.
• Generally, debts are subtracted from the total Zakatable assets.
• Strong debt receivables are included in the Zakatable assets (for example, someone has borrowed money off you, or you are expecting a cash refund from a trip cancellation or you are expecting money for sold goods) although the Zakat on this amount can be deferred until after receipt.

Based on these principles, the questions are now addressed:

7 scenarios where payment made

1) If the transaction is cancelled after the Zakat anniversary, Zakat will not be due on the refunded amount.

2) If the transaction is cancelled and the full refund is received before the Zakat anniversary, Zakat is necessary on this amount.

3) If the transaction is cancelled before the Zakat anniversary and the person believes that the refund will be received, Zakat is necessary on this amount. However, the Zakat on this amount can be deferred until after receipt.

4) If the transaction is cancelled before the Zakat anniversary, and the person believes that the chance of recovering the money is zero or unlikely, Zakat is not necessary. If at any point in the future, the money is refunded, Zakat will be due from this date onward (on his next Zakat anniversary, or the passing of one lunar year if he has no other Zakatable assets) and does not have to be backdated.

If, however, he believes that there is a good chance of recovering the refund, Zakat will be necessary and it can be deferred until after receipt, as mentioned in number 3.

5) If the transaction is cancelled before the Zakat anniversary and a voucher is issued and the person is content with this, there is no Zakat on the voucher.

6) Likewise, if a monetary refund is not guaranteed and a person does not know whether he will get a cash refund or a voucher, Zakat is not necessary. However, if a person is legally entitled to a cash refund and believes that there is a good chance of recovering the refund and plans on doing so, Zakat will be necessary, and it can be deferred until after receipt.

7) If the transaction is cancelled before the Zakat anniversary and the travel agent promises that only the Airline costs will be refunded, Zakat will only be necessary on the airline refund amount, which can be deferred until receipt.

In relation to the other costs, if the person is content with the voucher, there is no Zakat on it. If, however, he is legally entitled to a cash refund and believes that there is a good chance of recovering the refund and plans on doing so, Zakat will be necessary, and it can be deferred until after receipt.

2 scenarios where payment not made

In relation to the two scenarios where the transaction was finalised but the payment was not made:

1) If the booking is cancelled before the Zakat anniversary, Zakat is necessary on the amount that would have otherwise been due.

2) If the booking is cancelled after the Zakat anniversary and the customer regards it a debt on his Zakat anniversary, Zakat is not necessary. If, however, he does not regard it a debt and has no intention of paying it due to knowing that it will be cancelled, then Zakat is necessary.

قال السمرقندي في تحفة الفقهاء (١/٢٩٣): الدين عند أبي حنيفة على ثلاث مراتب: دين قوي ودين وسط ودين ضعيف، فالدين القوي هو الذي ملكه بدلا عما هو مال الزكاة كالدراهم والدنانير وأموال التجارة وكذا غلة مال التجارة من العبيد والدور ونحوها، والحكم فيه أنه إذا كان نصابا وتم الحول تجب الزكاة لكن لا يخاطب بالأداء ما لم يقبض أربعين درهما، انتهى۔

وفي رد المحتار (٢/٢٦٦) والفتاوى الهندية (١/١٧٥) عن محيط السرخسي: ولو هرب غريمه وهو يقدر على طلبه أو التوكيل بذلك فعليه الزكاة، وإن لم يقدر فلا زكاة عليه، انتهى۔

وقال الشيخ أشرف علي التهانوي في إمداد الفتاوى (٢/٦٣): قول  مختار یہ ہے کہ جس قرض کے وصول ہونے کی امید ضعیف ہو یا بالکل نہ ہو ، قبل وصول اس پر زکوۃ واجب نہ ہوگی، اور وصول کے بعد جس قدر وصول ہوگا بعد حولان حول آئندہ صرف اسی قدر پر زکوۃ واجب ہوگی، انتهى. ونحوه في جديد فقهي مباحث (٧/٩٥٠)۔

Allah knows best

Yusuf Shabbir

3 Shawwāl 1441 / 26 May 2020

Approved by: Mufti Shabbir Ahmad and Mufti Muhammad Tahir