Question Summary:
Do I have to pay zakaat on down payment?

Question Detail:

 my department has started a housing scheme. i have deposited Rs. 1,000,000 as down payment and Rs 12000 will be deducted from my salary every month till my retirement. Department will hand over the house to me over my retirement i.e after 18 years. I want to ask wheter I have to offer zakat every year on the money which my departement has collected from me in the form of downpayment and monthly installments. Jazak Allah

Answer :

In the Name of Allah, the Most Gracious, The Most Merciful.
As-salaamu `alaykum wa-ramatullahi wa-barakatuh.
What exactly are the terms and conditions of the housing scheme?
What will be the role of the employer?
What will be your role?
 We require more information for us to issue a ruling.                         
 
And Allah Ta`ala Knows Best.
Hussein Muhammad.
Student Darul Iftaa
Tanzania
Checked and Approved by:
Mufti Ebrahim Desai.
From: muhammad akhtar [mailto:engmasood@hotmail.com] 
To: Askimam <admin@askimam.org>
Subject: Re: Answer
 
Wa alaikum Assalam Warahmatullāhi Wabarakatuh
 
Terms & conditions are as follows:
 
- employee has to deposit Rs. 1000000 as down payment and 30000 as membership fee.
- monthly Rs. 12000 approx. will be deducted from salary.
- House/apartment will be handed over to employee on retirement at age of 60 yrs.
- House/apartment is not allotted or dedicated at the time of submission of down payment but will be allotted at  the time of retirement (at present employee don't know the where about/ location of the House/apartment ).
- employee can withdraw down payment and amount deducted from salary at any time but 10 % of that amount will be deducted.
 
role of the employer
 
- employer/housing foundation will collect money from member employees and arrange House/apartment for employee who is going to be retired.
 
role of the employee
 
employee role is nothing but just to deposit instalments and down payment.
 
hoping you will find this information enough to reply my query. 
Jazak Allah
 
Answer:         
In the Name of Allah, the Most Gracious, The Most Merciful.
As-salaamu `alaykum wa-ramatullahi wa-barakatuh.
According to your explanation, the contribution of the employee through the initial down payment and monthly deduction is a trust in the possession of the employer/housing foundation. That amount will be regarded as cash on hand when calculating zakat.
If the cash on hand is equivalent to or more than the nisaab and that amount is over and above ones liabilities, then that amount is zakaatable.[1]
If you already purchased the house and make payments towards the house, then only that amount is not zakaatable.
And Allah Ta`ala Knows Best.
Hussein Muhammad.
Student Darul Iftaa
Tanzania
Checked and Approved by:
Mufti Ebrahim Desai.