Fiqh-us-Sunnah - 3.8

Hadith 3.8.1

Who is Obliged to Pay Zakah?

Zakah must be paid by every Muslim who has a nisab, which is the minimum of one's holdings liable to zakah. The nisab is conditioned by the following: Zakah should be paid on any amount of money remaining after meeting the expenses for such necessities as food, clothes, housing, vehicles and craft machines.
A complete year of Islamic calendar should pass, starting from the very day of the nisab's possession, without any decrease during the year.
In case of its decrease (being less than nisab), the year count (hawl;) starts from the day of the nisab completion.
Commenting on the issue, an-Nawawi said: "In our view and the views of Malik, Ahmad, and the majority of scholars, the amount of property liable for payment of zakah, such as gold, silver, or cattle, is tied to the completion of nisab through the turn of a whole year. If the nisab decreases in any time of the year, [the counting of] the year discontinues. Later, if the nisab is completed, the year count is resumed from the time of its completion."
On the same subject, Abu Hanifah holds: "What matters isthe availability of nisab at the beginning and end of the year. Its decrease at any time in between does not matter, even though the zakah payer had two hundred dirhams and he lost all but one dirham during the year, or if he had forty sheep, all of which died except for one during the year. If, at the end of the year, he had two hundred dirhams, or forty sheep, then he must pay zakah on all of that. This condition is not applicable to the zakah of plantations and fruits, for their zakah should be paid on the harvest day. Allah, the Exalted One, says: 'And pay the due thereof upon the harvest day' [alA'raf 142]."
Al-'Abdari elaborated that: "The holdings subject to zakah are of two kinds. The first kind grows by itself: crops and fruits. The second kind is used for growing and production: money, merchandise, and cattle. In the former case, zakah should be paid at the time of harvest. In the latter case, it should be paid at the end of the haul.
This was the opinion of all jurists as reported in anNawawi's al-Majrnu'."