Ruling 1804 — The One-Fifth Tax (Khums)

If a person borrows money to increase his wealth or to purchase something that he does not need, then in the event that he repays the loan from the profit he acquires in that year without paying khums, he must pay khums on the money he borrowed or the item he purchased with the loan after the arrival of the khums year unless the money he borrowed / item he purchased with it perishes during the year.