The ruling concerning the Zakât on the debt

Question:

If someone lends a sum of money to another,what are the details of the issue concerning the Zakât on this money taking into consideration the situation of the agreement concluded between the creditor and the debtor?Please deliver us the fatwa regarding our question, and may Allah reward you with the blessings.

Answer:

All praise is due to Allah, the Lord of the Worlds. Peace and blessing be upon whom Allah sent as a mercy to the Worlds, upon his Family, his Companions and his Brothers until the Day of Resurrection:

Whoever lends money to anothercomes under two probabilities:either he is desperate of getting his money back or there is a hope of regaining it. If he has no hope of getting his money back, then there is no Zakât thereof. However, if there is a hope of getting his money back and this money reached An-Nisâb ⁽¹⁾ either alone or by adding it to the original wealth of the same kind, then there are three cases:

- If the creditor is capable to regain his money from the debtor at any time he wants, then he has to pay the quarter of the tenth as Zakât thereof, after every lunar year, for the due recipients of Zakât.

- If he is incapable of getting his money back except after a given period of time, then there are two cases: either the period is determined by months or years, so in this case he pays the Zakât on the loan and counts it among his original money if it exists in each Hawl ⁽²⁾, or the period is undetermined, so he has to pay Zakât on the loan for one year according to the most valid opinion of the scholars; then he does not pay Zakât [on the loan] unless after receiving it. So, once he receives it, he has to pay its Zakât for the years during which he did not pay its Zakât, for it concerns the rights of the humans, and pursuant to the saying of ‘Â’isha رضي الله عنها: “There is no Zakât on it (the loan) until he receives it” ⁽³⁾, and the saying of ‘Ali رضي الله عنه concerning the doubtful debt: “If he is truthful, then let him pay its Zakât for the preceding years if he received it” ⁽⁴⁾. Nevertheless, if he does not receive it, he is under no obligation to pay its Zakât after he has paid the first year on his loan, according to the saying of ‘Â’isha رضي الله عنها: “There is no Zakât on the debt” ⁽⁵⁾.

The perfect knowledge belongs to Allah عزَّ وجلَّ; and our last prayer is all the praises and thanks are to Allah, the Lord of the Worlds, and prayers of Allah are to Muhammad and his Family, Companions and Brothers until the Day of Resurrection.

Algiers, Jumâda Ath-Thânia 23^rd, 1426 H
Corresponding to July 29^th, 2005 G.

(1) An-Nisâb: is the amount limit for the payment of Zakât. It is equal to 85g of gold. A Muslim who possesses wealth below An-Nisâb is exempted from paying Zakât, while a Muslim who possesses wealth at or above An-Nisâb is obliged to pay Zakât. Translator’s note.

(2) Al-Hawl: is the completion of one lunar year cycle on possessed wealth. This is a specific condition for livestock, gold and silver (money), and trade goods. However, crops, fruits, minerals and buried precious metals do not require completion of the cycle and the Zakât on them should be paid when they are harvested or extracted from the ground. Translator’s note.

(3) Reported by Ibn Abî Shayba in “Al-Musannaf” (10259). This hadith is judged Haşan (good) by Al-Albânî in “Al-Irwâ’ ” (784).

(4) Reported by Ibn Abî Shayba in “Al-Musannaf” (10256) and by Al-Bayhaqî in “As-Sunan Al-Kubrâ” (7623). See: “Al-Irwâ’ ” (785).

(5) Reported by ‘Abd Ar-Razzâq in “Al-Musannaf” (7115) and by Ibn Abî Shayba in “Al-Musannaf”. This hadith is judged Haşan (good) by Al-Albânî in “Al-Irwâ’ ” (784).