Does Debt Reduce the Amount of Zakah That Must Be Paid?

Question: The questioner asks, He has a debt estimated at about fifteen thousand eight hundred dollars. This amount was taken from one of his relatives. When the money was given, no specific date for repayment was agreed upon. Rather, the owner of the money may request it at any time, perhaps tomorrow, or after several months, or at a later time. So what is the correct way to calculate zakāh in this situation? Should he deduct this debt from the total amount in his bank account first, then pay zakāh on the remaining amount? Or should he pay zakāh on the full amount that he owns without deducting the debt?

Summary:

The basic principle is that zakāh becomes obligatory on wealth when it reaches the niṣāb and a full lunar year has passed over it, due to the general statement of Allah the Most High: Surah al-Baqarah (2:43) Establish prayer, pay alms-tax, and bow down with those who bow down. The issue of deducting debt is a matter of disagreement among the jurists. The majority of Mālikīs, Shāfiʿīs, a narration from the Ḥanbalīs, and the choice of Ibn Taymiyyah and Ibn ʿUthaymīn say that debt does not prevent zakāh, so you give zakāh on all the money that you possess. The Ḥanafīs and a narration from the Ḥanbalīs say that the due debt is deducted from the wealth, and zakāh is paid on the remaining amount. The stronger and more cautious view is that as long as the money remains in your account when the year completes, and you have not actually repaid the debt, then you pay zakāh on the entire amount and do not deduct the debt. However, if you are going to pay it immediately when the year completes, then you may deduct what you will pay and give zakāh on the remainder.

Answer:

In the name of Allah, all praise is due to Allah, and may Peace and Blessings be upon the Messenger of Allah (ﷺ)

First, the foundation of the obligation of zakāh

Allah the Most High said:

From the Qur'an:

  • surah Al-Baqarah 33
    Establish prayer, pay alms-tax,1 and bow down with those who bow down.

    The Prophet ﷺ said,

From the Sunnah:

  • sahih muslim 987Abu Huraira reported Allah's Messenger (way peace be upon him) as saying:
    If any owner of gold or silver does not pay what is due on him, when the Day of Resurrection would come, plates of fire would be beaten out for him;

    The basic principle is that zakāh becomes obligatory on wealth if it reaches the niṣāb, a full year passes over it, and it is fully owned.

Second, does debt cancel zakāh or reduce it? This issue contains disagreement among the jurists, especially if the debt is due now or deferred. The situation described in the question is that the debt has no fixed date, and the owner may request it at any time, therefore it is treated as a due debt. The Opinions of the Scholars Regarding Deducting Debt From Zakāh Wealth First Opinion Debt cancels or reduces zakāh completely. This is the view of Abū Ḥanīfah and his companions a narration from Aḥmad ibn Ḥanbal and it is reported from some of the Salaf. Their evidence Zakāh is only obligatory on wealth that exceeds one's needs. A person in debt is not truly wealthy because his liability is occupied. They also relied upon reports from some Companions who instructed that debts should be deducted. According to this view, if someone has 50,000 and owes 15,800, he only gives zakāh on the remaining amount, which is 34,200. Second Opinion Debt does not prevent zakāh. This is the view of Mālik ibn Anas al-Shāfiʿī a strong narration from Aḥmad ibn Ḥanbal and the choice of Ibn Taymiyyah, Ibn Bāz, and Ibn ʿUthaymīn. Their evidence The general texts obligating zakāh, and there is no clear authentic text stating that debt is deducted. The Prophet ﷺ used to send collectors who would take zakāh from the owners of wealth, and they did not ask them whether they had debts. Debt is attached to the liability, while zakāh is attached to the wealth, therefore one does not cancel the other.

From the Scholars:

  • Shaykh al-Islām Ibn Taymiyyah said:
    “Debt does not prevent the obligation of zakāh on visible wealth.”

From the Scholars:

  • Shaykh Ibn ʿUthaymīn said:
    “The correct view is that debt does not prevent zakāh, whether it is due or deferred.”

The More Precise Reconciliation Chosen by Some Contemporary Scholars Some contemporary scholars combined between the two views and said: If the debt is due immediately and must be paid now, and the creditor is demanding it, then the amount that will be paid immediately may be deducted. However, if the debt is not currently demanded and the money remains with you and is growing in your account, then zakāh should be paid on the entire amount. This is the choice of many contemporary scholars. Applying This to Your Situation The debt has no fixed due date, but the owner may request it at any time, and he has not demanded it now. There are three possible situations. First situation, he has not demanded it when the year completes. The safer and more cautious approach is to pay zakāh on the entire wealth. Second situation, he demands it before zakāh is paid and you will repay it immediately. You deduct the amount that will be paid now and pay zakāh on the remainder. Third situation, you will repay only part of it now. You deduct only the portion that will be paid immediately. The stronger view among many scholars is that debt does not prevent zakāh. The safer approach for you is to pay zakāh on the entire amount you possess if the money is in your account when the year completes and the creditor has not demanded repayment. It is permissible to deduct the amount if you will actually repay it when the year completes. Important Note If the debt consumes all of the wealth such that if it were paid no niṣāb would remain, then zakāh is not obligatory.

And Allah knows best.

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