When debt is deducted from Zakah owed on gold, silver and cash

19-6-2015 | IslamWeb

Question:

SalamLast year i took loan of Rs.950000/- from my company to buy a residential plot. I am returning the loan to the company in the form of intallments of Rs.25000/- per month which are automatically deducted from my salary every month.I could not get the plot up till now and one year has passed since i took the loan.1. is there zakat on the money possessed as a loan, for buying a residential plot.2. do i have to pay zakat for all of the amount3. or i have to pay zakat only for that amount of loan which have been returned to the company in a yearthanks and waiting for your reply

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Answer:

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.

We have already clarified in Fatwa 116828 that the view we adopt on Islamweb is that the Zakah on intangible assets (gold, silver and cash) is waived by debt if the payer of Zakah does not have enough assets in excess of his personal needs to be able to place it up against the debt.

Therefore, if you do not have other assets in excess of your basic need, such as real estate, a vehicle or something else, then you would deduct the value of your remaining debt from the total amount in your possession and pay the Zakah on the amount remaining if it is not less than the Nisaab (minimum amount liable for Zakah).

Allaah Knows best.