I have debts. Do I have to pay zakat?
The basic principle is that debts are deducted from the estate, and if the remaining amount still exceeds the nisab threshold, zakat is payable, otherwise not.
However, if a person has a large debt that is paid in instalments, such as a mortgage or a large credit card debt, then only the payment that is currently due should be deducted from the estate.
Example:
Malik has assets worth PLN 10,000 but owes his creditors a total of PLN 7,000. At the end of the zakat year, he will pay zakat from PLN 3,000.
Amer has savings of PLN 2,000 and a mortgage of PLN 80,000, which he repays in monthly instalments of PLN 400. The date of his zakat coincides with the due date of the monthly instalment, so he pays zakat on the amount of PLN 1,600.
I lent money to someone, do I pay zakat on it?
Yes. You can either pay zakat for each year that passes until you receive your loan back, or you can wait until you receive your loan and then pay the accumulated zakat in one go.
If the loan is insecure and you are not sure whether the borrower will be able to repay it, it is better to delay payment of zakat until it is received, at which point zakat accumulated over the years will be due. If you never receive the money back, zakat will not be due.
Someone owes me money for work I have done for them, should I pay zakat?
Zakat is not due on money for work done until you are paid.
Similarly, zakat is not payable on a dowry that you have not yet received, nor on a share of an inheritance that is due to you but has not come into your possession.
I have taken out large commercial loans to expand my business. How will this affect the calculation of my zakat?
A loan taken to acquire zakatable assets such as raw materials, goods, etc. can be deducted from the capital. You pay zakat on what remains.
A loan taken out to acquire non-deductible assets, such as furniture, machinery and buildings, is not deductible.
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