In the name of Allah al-Rahman al-Rahim
It is necessary upon you that you immediately pay however much zakah you owe. Whatever delay has occurred up until now you must repent from it with a true heart and make a binding commitment that you will not do such a thing in the future.
The way to pay the zakah of the preceding years is to calculate the wealth of the first year in which you didn’t pay zakah, meaning stock merchandise, the value of gold and silver at that time and currencies and divide all of this by 40. The answer that you get from this will be the zakah of that first year. Now the amount of zakah payable from the first year will be subtracted [from the total assets] when calculating the zakah for the second year i.e. having subtracted this amount if the person is sahib e nisab [owner of the threshold amount of wealth which makes a person laible for zakah] he will pay zakah over all the remaining amount. If it is currency then upon itself and if it is gold or silver then in accordance with its value he will divide all of this by 40 and the answer will be the zakah of the second year. In this same way repeat this process until no zakah remains liable upon you.
Each year when the wealth has reached the nisab amount anything beyond the nisab which does not reach a fifth [of the nisab] then zakah upon that is not necessary. It has been said that the wealth should be divided by 40 and this is because the fard of Zakah is one fourtieth [2.5%]
Just as has been mentioned in a blessed hadith:
“So when it has reached 200 [dirhams] then there is 5 dirhams from it”
[Sunan al-Tirmidhi Hadith 620]
Five dirhams is one fourtieth of 200 dirhams.
A’la Hazrat Mujaddid-e-Din Imam Ahmad Rida Khan (may the mercy of Allah be upon him) says in answering a question that zakah will be necessary each year as long as the wealth is not below the nisab this is because when the first year’s zakah is to be given then the person is in debt by that amount for the second year so by reducing the total by this amount he should pay zakah over the rest [for the second year]. For the third year he will be in debt concerning the zakah of the first and second year so by deducting those amounts he will be liable for zakah over what remains. In similar vein after removing the zakah amounts liable from the previous years then what remains if it reaches the nisab itself or by adding to it other zakatable wealth then zakah must be paid over that otherwise [if it does not reach nisab] then it will not [need to be paid].
[al-Fatawa al-Ridawiyyah Volume 10 page 144]
It is mentioned in summary from Fath al-Qadir that:
“There is sin associated in unnecessarily delaying the payment of Zakah as al-Imam al-Karkhi has clearly stated and al-Hakim al-Shahid in al-Muntaqa and that is exactly what al-Faqih Abu Ja’far has related from al-Imam Abu Hanifah (may Allah be please with him that it is disliked (makruh) to delay it without an excuse. Because prohibitive dislike is what it [karahah – dislike] is carried upon when it [karahah] is mentioned in an absolute form by them. It is similarly reported from Qadi Abu Yusuf. It is also mentioned from Imam Muhammad that the testimony of a person is rejected by delaying the payment of Zakah as it is the right of the poor. Thus the necessity of immediate payment of Zakah is established from all 3 Imams.”
[Summarised from Fath al-Qadir Volume 2 page 114]
A’la Hazrat Mujaddid-e-Din Imam Ahmad Rida Khan (may the mercy of Allah be upon him) has also stated that this is the relied upon view in the Hanafi Madhab.
It is mentioned in al-Fatawa al-Ridawiyyah that according to the correct and relied upon opinion in the Madhab the payment of Zakah is immediately necessary. Thus the one who does not pay his zakah such that the next year passes then he is a sinner. Similarly according to the most correct and outweighed opinion the obligation of Hajj [is immediately necessary]. Thus that year in which one has capability he should travel for Hajj otherwise he is sinful.
[al-Fatawa al-Ridwiyyah Volume 16 page 559]
Furthermore one should remember that the first ever year of reaching nisab then it’s date; month, day and time should be exacted and then in accordance to the Islamic [lunar] year the calculation of zakah should be undertaken. This is because in relation to zakah it is the Islamic [lunar] year which is considered.
Answered by Mufti Qasim Zia al-Qadri
Translated by Mawlana Ibrar Shafi