Zakat - Calculating Zakat With Long Term Debts
  • Question:

    I have an Islamic mortgage for $150,000 over a period of 25 years, plus, a loan from a family member amounting to $100,000. Currently, I have at hand $10,000 in savings. I am repaying $1900 per month to cover the outstanding debt. I wish to know how much Zakat is owed if any.

    Assalamu Alaikum wa rahmatullahi wa Barakatuh

    Thank you for your question.

    If one has long terms debts, it would be permitted to deduct up to a year’s worth of repayments, and not the entire debt.

    As such, one would: [1] calculate all of one’s zakatable assets — gold, silver, cash/savings, money lent out, trade goods, stocks, and so on — and [2] deduct one’s debts and immediate expenses (up to a month). Thereafter, if one was in possession of the zakatable minimum (nisab), it would be obligatory to pay zakat.

    [Ibn `Abidin, Radd al-Muhtar; Kasani, Badai` al-Sanai`]

    And Allah alone gives success.

    Answered by Ustadh Tabraze Azam

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