Authority of the Maxim
Quran: An-Nisa 114
The Messenger of Allah (ﷺ)said, "The deeds are considered by the intentions, and a person will get the reward according to his intention. So whoever emigrated for Allah and His Messenger, his emigration will be for Allah and His Messenger; and whoever emigrated for worldly benefits or for a woman to marry, his emigration would be for what he emigrated for". (Sahih Bukhari, 6953; Sahih Muslim, 1907)
Brief explanation of this maxim
Intention has a significant role in judging any action.
In Shariah, one of the key functions of intention is to differentiate between acts of worship (ibadah) and customary acts (‘adah).
In the absence of proper intention, the doer of an act will be deprived of the reward of an act of worship. For instance, a person abstaining from food and drink from dawn to sunset without the intention of fasting will be void of Allah’s reward and not be deemed to have fasted.
Most importantly, Shariah illicit matters or means will still be considered prohibited regardless of how well or good the intentions are.
Conditions on this maxim
The intention should not contravene the objectives of the Shariah and its prescribed rulings. E.g: stealing from the rich to give it to the poor.
The intention should be unambiguous and clear from the beginning of the action. E.g: making intention to pay zakat or to make customary donation.
A single act cannot be commingled with two incompatible intentions. E.g: One should not pray zuhr prayer with the intention of performing both zuhr and asar prayers.
Other Main highlights of this maxim:
An intention without action has no effect. E.g.: If a person intends to donate his property but never really does it, the property is still his.
A good intention without action is still rewarded. E.g: if a person intends to donate a portion of his money to the poor but does not really act on it, then he will still be rewarded for his good intention.
A bad intention without action is rewarded. E.g: if a person intends to steal but does not really act on it, then he will be rewarded for abstaining from doing a sin.
Applications to daily life:
Intention of stockholders/shareholders determines which zakat rule applies to corporate shares.
If the intention was to benefit from the annual dividend of the shares only without any intention of trading them, zakat is payable as overall income. E.g: Total Zakat payable = Sum of total income (including dividend income, etc.) and savings [which is above nisab and have reached 1 lunar year] x 2.5%
If the shares were bought with the intention of trading them, zakat is payable as trade merchandise. E.g: Total Zakat payable = Sum of total value of current shares in possession [which trading intention has reached 1 lunar year and value is above nisab] x 2.5%