Answered by Ustadh Tabraze Azam
Why it is not valid to forgive a debt someone owes you and to deem it as zakat?
Answer: Wa alaikum assalam wa rahmatullahi wa barakatuh,
I pray that you are in the best of health and faith, insha’Allah.
A condition for the validity of zakat is transfer of ownership.
Simply put, the poor person must gain ownership of the wealth such that he can do with it as he wishes. This is understood directly from the Qur’anic verse delineating the permissible avenues of zakat funds.
Forgiving a debt does not fulfil this condition, and is hence impermissible as a method of discharging your zakat; this is despite it leading to the same result (i.e. in his returning the money to the creditor, in the case he wishes do so.)
Similarly, and just as example to illustrate the above, an unmarried couple can be the means of bringing about a child in an unlawful manner; yet a simple statement of “I have married you,” with its other related conditions and sunnas, turns it into a lawful contract and relationship. The result is the same (i.e. the child), but the latter is in congruence with revelation, and the former is not.
The same can be said of much in the Sacred Law, and it is from Divine Wisdom that things are as they are– sometimes such Wisdom is plain, and others, it is not.
Please also see: Zakat
And Allah alone gives success.
Checked & Approved by Faraz Rabbani