Who pays Zakaat on borrowed wealth

Fatwa ID: 01860

Answered by Mufti Abdullah al-Ma’mun

Question:

Assalamulaekum, some people borrowed an amount equivalent to the wealth of 87grams of gold. So shall I pay zakat on that amount as well? JAZAKALLAH

Answer:

Bismillah

Either you (the creditor) or the debtor can pay the Zakat for the wealth equivalent to 87grams of gold. It is mentioned in 'Fatawa Darul Uloom':

“Money that was lent, whether alone or with the inclusion of other capital, if it reaches the value of Nisab, Zakat will be necessary upon it. But this (the Zakat) will only be paid after having acquired this amount back from the debtor. However if the Zakat is paid before acquiring the debt from the debtor, this is also permissible.”

(Fatawa Darul Uloom Deoband v6 p52 see also Durr al-Mukhtar p132 Bab Zakat al-Maal)

In the scenario where the debtor is paying the Zakat on behalf of you, the payable amount of Zakat will be subtracted from the total amount of debt which he owes you.  For example if you tell the debtor to pay the Zakat from £2486 (the equivalent of 87grams of gold correct to date 8/6/2013) then it is as though you have made the debtor a representative to pay off your Zakat. Hence the debtor will pay £62.15 in Zakat. Thus he will now owe you only £2423.85, however, it should be ensured that the representative is god fearing (Muttaqi).

(see also http://daruliftabirmingham.co.uk/debtor-paying-zakat-on-creditors-behalf)

Only Allah Knows Best

Written by Mufti Abdullah al-Ma’mun

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham.

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