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Zakah on debts

Answered as per Hanafi Fiqh by DarulIftaBirmingham

Zakah on debts

In the name of Allah, the most Beneficent, the most Merciful.  


If one is Sahib Nisab (i.e. posses that amount which makes zakat obligatory) but also has debts outstanding.  At the end of the year he or she has to deduct his or her debt amount from his or her assets and if there is still nisab remaining, 2.5% from there will be given for zakat.   (Fatawa Rahimiyah p.155 v.5)

A person is also obliged to give Zakaat on money or valuable owing to him, whether it be a loan or a business debt. There are three types of debts:

1. Qawi (secure loan)

If cash, gold or silver has been given as a loan or when merchandise has been sold on terms and the payment is received after a year or two; and the value of the amount owing is that of Nisaab, then this is called a Qawi loan, and therefore, Zakaat for those years prior to payment wiil be Farz.

2. Mutawassit (insufficiently secure loan)

If a loan is not cash, gold, silver or merchandise (as mentioned in 1. (a) above) but is personal effects sold (old clothes, house-hold items etc.) or is a property which was sold and the value of it is that of Nisaab, then it is called a Mutawassit loan. Thus Zakaat for those year will not be Farz.

 3. Dha’eef (Insecure loan)

If money owing to one is not in lieu of cash, gold, silver, merchandise or personal effects or property, which is sold but is due to outstanding inheritance, bequests, Mahr (dowry) salary etc. then it is called a Dha’eef loan.  Zakaat will become Farz when these monies are received and they are equal to or in excess of Nisaab, and further, they are retained for a full Islamic year. There is no Zakaat for the years that have passed before receiving these amounts. (Fatawa Hindiyyah p.189 v.1)

Only Allah Knows Best

Mohammed Tosir Miah

Darul Ifta Birmingham

This answer was collected from DarulIftaBirmingham.co.uk, which is run under the supervision of Mufti Mohammed Tosir Miah from the United Kingdom.

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