Zakaat on long term debts

Question:-

If you have a loan of R10 million and paying it off at R20 000 a month, how do you calculate your Zakaat?

Answer:-

If a person is owing R10 million (for a loan that he has taken) and is paying R20 000.00 a month towards the debt, then, in total, he will be paying R240 000.00 a year. When calculating Zakaat, he will deduct the total installments for the year of R240 000.00, and pay Zakaat on the remaining Zakaatable assets that he owns.

For example, the debtor possesses cash, investments, jewellery, etc. to the value of R1 million. He will deduct the yearly repayment of R240 000.00 and pay Zakaat on the remainder which is R760 000.00.

ALLAH TA’ALA KNOWS BEST!

ANSWERED BY:

Mufti Mohammed Desai

Date: 13 Shabaan 1444 / 06 March 2023