Statements of the Scholars Regarding Debt as a Barrier to Zakah
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Q: If a man has capital with which he trades, and he borrows from this person and takes from that person until the trade is settled, then when the lunar year passes, is he obligated to pay zakah on all that he has, or does he calculate the debt he owes and pay zakah on the remainder? And what is the stronger position among the scholars' statements in your view?
A: The scholars differed regarding debt as a barrier to the obligation of zakah, with the following positions:
The first is that hidden wealth, such as the two currencies and merchandise for trade, does not require zakah if the debt reduces it below the nisab; because zakah was legislated for mutual assistance, and one who has a debt that reduces the nisab or consumes it entirely is not described as wealthy, but rather is one to whom zakah should be given.
As for apparent wealth, such as livestock and fruits, since what was transmitted from the Messenger of Allah (peace and blessings be upon him) and his successors (may Allah be pleased with them) was the sending of collectors to take zakah from them without any report of them inquiring whether their owners had debts or not, the ruling for them differs from hidden wealth. Malik and al-Awza'i held this view, and it is one of the two narrations from Imam Ahmad regarding apparent wealth.
The second position is that zakah is not obligatory on them, just as with hidden wealth, for the reason previously mentioned.
The third position is that zakah is obligatory on the entire amount, based on the evidence we mentioned for the obligation of zakah on apparent wealth, even if their owners have debts. Also, because the evidence indicating the obligation of zakah on apparent and hidden wealth contains nothing indicating that debt should be taken into consideration, generalization is required.
This is the view of Rabi' ibn Abi al-Abd al-Rahman, Hammad ibn Abi Sulayman, and al-Shafi'i in his later view, and it is the correct one.
Accordingly, in the case of the question, zakah is obligatory, acting in accordance with the generality of the evidence and the absence of a specific exception that can be reliably relied upon. And Allah knows best.
A: The scholars differed regarding debt as a barrier to the obligation of zakah, with the following positions:
The first is that hidden wealth, such as the two currencies and merchandise for trade, does not require zakah if the debt reduces it below the nisab; because zakah was legislated for mutual assistance, and one who has a debt that reduces the nisab or consumes it entirely is not described as wealthy, but rather is one to whom zakah should be given.
As for apparent wealth, such as livestock and fruits, since what was transmitted from the Messenger of Allah (peace and blessings be upon him) and his successors (may Allah be pleased with them) was the sending of collectors to take zakah from them without any report of them inquiring whether their owners had debts or not, the ruling for them differs from hidden wealth. Malik and al-Awza'i held this view, and it is one of the two narrations from Imam Ahmad regarding apparent wealth.
The second position is that zakah is not obligatory on them, just as with hidden wealth, for the reason previously mentioned.
The third position is that zakah is obligatory on the entire amount, based on the evidence we mentioned for the obligation of zakah on apparent wealth, even if their owners have debts. Also, because the evidence indicating the obligation of zakah on apparent and hidden wealth contains nothing indicating that debt should be taken into consideration, generalization is required.
This is the view of Rabi' ibn Abi al-Abd al-Rahman, Hammad ibn Abi Sulayman, and al-Shafi'i in his later view, and it is the correct one.
Accordingly, in the case of the question, zakah is obligatory, acting in accordance with the generality of the evidence and the absence of a specific exception that can be reliably relied upon. And Allah knows best.
Source
binbaz.org.sa
The Arabic text is copied verbatim from the original source, without any edits.