Fatwa ID: 09235
Answered by Muftiyah Aisha Qureshi
Question:
السلام عليكم ورحمة الله وبركاته.
Respected Muftiyane kiraam, few zakat related questions:-
- The money that one is expecting to receive as a tax refund for the previous tax year, is zakat due on that projected amount, if one has not yet filed their taxes/received that refund yet? [E.g. someone’s zakat is due in Ramaḍān, they will be filing their 2025 tax return in April, after which the refund will be given, but they know approximately how much refund they will get]
- Is zakat due on the money in escrow that the financial institution holds (for future payment of property taxes & insurance), for someone who is doing home financing, even though they are not allowed to withdraw those funds at any time?
- If someone signed up for a cc 6 months ago, which was offering an 18 months 0% financing option, after which they spent a large amount on it, can they count that as a current debt at the time of calculating the current years zakat, even though the full amount is only due, lets say after 12 months?
بينوا توجروا… جَزَاكُمُ اللهُ خَيْرًا في الدارين
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
Zakat is one of the fundamental pillars of Islam and is an obligation upon Muslims who possess wealth above the nisab for one lunar year.
1. The money that you are expecting to receive as a tax refund, but which is not yet in your possession, is not subject to zakat. This is because one of the conditions for zakat is that the wealth must be in your possession and under your ownership. Once you receive the money and it remains in your possession for a complete lunar year, zakat will then become due on that wealth.
2. The money that a financial institution holds in escrow, which you are unable to withdraw or access, is not subject to zakat. This is because one of the conditions for zakat is complete ownership and control over the wealth, and in this case, you do not have full ownership or the ability to use that money freely. Therefore, zakat is not payable not his amount.
3. The debt that you have is not deducted when calculating your zakat because it is not yet due for payment. Since the debt will only become payable after another 18 months, it is not considered a current liability at the time of calculating zakat. Therefore, it does not reduce the amount of wealth on which zakat is due.
Only Allah ﷻ knows best.
Written by Muftiyah Aisha Qureshi
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham
References:
ومن كان عليه دين يحيط بماله فلا زكاة عليه،
Binaya sharh al hidaya vol 3 pg 300 maktaba shamila
وأما شروطها فسبعة: أربعة في المالك: وهو أن يكون حرا بالغا عاقلا مسلما وليس عليه دين، وثلاثة في الملوك: وهو أن يكون النصاب كاملا، حوليا، ومساما أو منجزا تعلقه أو نفلا.
Binaya sharh al hidaya vol 3 pg 288 maktaba shamila