What to do for ZAKAT when you have loan money sitting in Bank. Please tell me 1) End of the December, 2002 I had bank balance of $13,000 and $5,000 was loan out of 13,000 in my bank. Those money were going up and down from $2,000 to $13,000 through out the year. So, do I owe any zakat for 2002. 2) End of the December, 2003 I had bank balance of $12,000 and $7,800 was loan out of 12,000 in my bank. Those money were going up and down from $6,000 to $13,000 through out that year. So, do I owe any zakat for 2003.
Zakaat has to calculated on the end of your Zakaat year. You will have to determine how much cash you have on hand on the end of your Zakaat year.
To determine the Zakaat year, you will have to know when was the first time that you became the owner of Nisaab. If you became the owner of Nisaab on 20 Muharram for example, then every year you will have to calculate your Zakaat on the 20 Muharram. One has to use the Lunar Calendar.
Therefore if on the 20 Muharram of this year you own $4000 then Zakaat will have to be paid on this, even though your balance may have fluctuated during the year.
and Allah Ta’ala Knows Best
Ml. Imraan Vawda
FATWA DEPT.