I wanted to learn what is your view on application of zakah on money invested in stock shares? Do we need to pay zakah on the dividend alone or on the original investment, which cannot be divested at any point of time or both? In addition to this, we also posed a question that if Zakat is not applicable on the original investment, then whether Zakat is payable on monthly income which is received after deduction of 10% income tax, irrespective of the statutory exemption of income from income tax?
Zakat is either paid on the original amount (principal) or the return on investment. When an investment gives returns, it has always got to be on the returns at the rate of 10%. In case you are paying 10% tax at source, your Zakat has already been deducted. You don't have to pay anything further, except what you may want to spend voluntarily in the way of Allah.