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Committee money

Fatwaa ID: 614

Question:
Assalamo alikum Mufti Sahab,

Is committee money (a group of people sharing an allocated/fixed amount of money among each other based on the group member’s turn) considered a loan?
And if it’s a loan, then would we deduct this loan from our Zakat? or consider this as our savings?

Jazakallah Khair

Clarification:
There are 5 members in the group

The names of the person receiving the “committee” money is determined via a draw at the beginning of the committee start date

Each person would contribute £1000 every 2nd month

The collected money (£5000) would be given to one of the members every 2nd month (for example if committee started on 1st Jan then the amount would be given on end of Feb)

Once the last member receives the amount, the committee would be stopped.

Hope this makes sense and gives more context

Jazakallah khair

Clarification:
If a participant dies, his share would be given to his family, however, participants would let go of their shares if he owes it.
If one decides to pull out his share would be returned at the end (partial or full) whatever he’s paid

Answer:
In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.

We take note of the details of your query. We understand that each member makes a monthly contribution towards the pool. One person receives the pool of funds each month based on a draw. Once he receives funds, he will not receive again until everyone receives the same, although he must continue contributing until the total contribution is equal to the total amount received. There is no profit in the above. A person will only receive his contributed amount. Accordingly, this is permissible. It will be considered a loan to the pool until he receives his money back. Any extra amount he receives will be regarded as a debt until his contributions match. Thus, when assessing for zakaah, his contributions will be subject to zakaah. Any extra that he received for which he has not yet matched will be a deductible debt.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York
https://askthemufti.us/

07/26/1444 AH – 02/17/2023 CE | AMG3-3378

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين

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