The Ruling on Zakah in Wealth Part of Which Is a Loan

Q: The brother M. A. M. from Hawtat Banu Tamim in the Kingdom of Saudi Arabia says in his question: I have a sum of money in which zakah has become obligatory. Part of this sum is a debt I owe, which I borrowed from a public institution that provides loans without interest. This debt has reached the end of the lunar year along with the rest of the sum. Is zakah obligatory on the amount that is a debt I owe?

A: It is obligatory for you to pay zakah on all the money you have if the lunar year has passed over it, and the debt owed to the institution does not prevent this according to the most correct of the scholars' opinions. However, if you pay off the debt from the money you have before the lunar year passes over it, there is no zakah on what you spent to settle the debt. Rather, zakah is due on what remains after settling the debt, provided that the lunar year passes over it and it reaches the nisab. The minimum nisab for silver and what serves as its equivalent in goods is fifty-six Saudi Arabian silver riyals. As for gold, its nisab is twenty mithqals, which amounts to eleven and three-quarters of a pound in Saudi currency. May Allah grant success.