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Zakat if in debt

Answered as per Hanafi Fiqh by Fatwa.org.au
Is zakat compulsory on me? I earned $34,000 during the last financial year working as a security guard in Melbourne. I’m also a full-time international student. My two years tuition fees is more than $18,000. Jazakallahu Khairan.

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

Zakat will be compulsory on you if on your ‘zakat day’ the total value of your zakatable assets is equal to or more than the nisab (check our website for the current nisab). The zakatable assets are the following:

  • cash savings
  • gold
  • silver
  • merchandise

 
If you are in debt then deduct the amount you owe from the total value of the above assets. (For long term debts, only deduct the amount that is payable in one year). Thereafter, if the remainder is equal to or more than the nisab, zakat will be compulsory. If the remainder is less than the nisab, zakat will not be compulsory.

From the above, it is clear that it does not matter how much money one earned throughout the year. What matters is how much money and other zakatable assets one owns on his ‘zakat day’.

One’s ‘zakat day’ is that day of the lunar year (i.e. according to the Arabic calendar) on which he first become the owner of nisab. For example, if the first time you became the owner of nisab was on the 20th of Rajab, then your ‘zakat day’ will be the 20th of Rajab every year.

Since you did not give us all the required information, you can yourself decide if zakat is compulsory on you using the information above.

And Allah knows best.

Mufti Faizal Riza
3/8/2012

This answer was collected from Fatwa.org.au, which is connected to Darul Ifta Australia, based in Melbourne, Australia.
It is operated by Mufti Faizal Riza, a student of Mufti Ebrahim Desai from South Africa.

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