How do we know if some article we hold is a commodity, so that we know whether it is subject to zakah or not?
All commodities, which are articles of trade or commerce are subject to zakat. It is not possible to count the commodities one by one. Any article that is bought in order to sell and make profit is called “commodity” and it is subject to zakah. Articles of garments, foodstuff, construction materials etc. are only a few examples of such commodities.
An article must have the following two qualities to be called a commodity:
1) It must be bought in order to be sold,
2) The owner must have bought it aiming to make profit.
If any of these two qualities is missing, it cannot be called “commodity” in Islamic jurisprudence.
For example, cars that are bought for personal use are not commodities, and are not subject to zakah. If someone is a car-dealer and holds the same cars with the intention of selling, they would be articles of trade for him. Thus, being subject to zakah. Then, that person must calculate the 1/40th of their cost, which is the price he bought them for, and give out that amount as zakah.