Zakah on loans
Mu' meneen Brothers
and Sisters,
As Salaam Aleikum wa
Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be
upon all of you)
One of our
brothers/sisters has asked this question:
I have just started a business, Alhamdollilah, all is going very well, but I have some major loans to pay(interest free)for the business started.My lifestyle Alhamdollilah is good,Allah has bestowed good food, good educatian for my kids and a good house as well as a good car and every month I pay an installment of my loan, In this case is zakat due and if so how much?My partner and me have not distributed profits of the 1st year we ploughed it back in the expansion of the business. I feel guilty at times but honestly nothing is saved at the end of the month.Please guide.
(There may be some grammatical and spelling
errors in the above statement. The forum does not change anything from
questions, comments and statements received from our readers for circulation in
confidentiality.)
Answer:
In the name of Allah, We praise
Him, seek His help and ask for His forgiveness. Whoever Allah guides none can
misguide, and whoever He allows to fall astray, none can guide them aright. We
bear witness that there is no one (no idol,
no person, no grave, no
prophet, no imam, no dai,
nobody!) worthy of worship but Allah Alone, and we bear witness that
Muhammad(saws) is His slave-servant and the seal of His Messengers.
Zakah is due on the nett worth
of the person. Thus all you have to do
is calculate your total worth, deduct
your liabilities and loans; and then
calcuate 2.5% of your Nett Worth. That
is the amount that is due as payment in Zakah.
Thus, if your total worth,
including your share of the business,
is say $10,000.00. The loans
that are outstanding against you are $7,000.00. Thus your nett worth is $3,000.00 and the zakah due is 2.5% of
that amount, ie. $75.00.
But if your total worth, including your share of the business is say
$10,000.00, but the loans outstanding
against you are $ 20,000.00.
Thus, your nett worth is
actually negative -$10,000.00, and no
zakat is due from you.
Whatever written of Truth and
benefit is only due to Allah’s Assistance and Guidance, and whatever of error
is of me. Allah Alone Knows Best and He
is the Only Source of Strength.
Your Brother in
Islam,
