National Zakat Foundation
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How to deduct a debt from Zakat calculation
Does a debt impact your Zakat calculation?
With regards to debt deductions, there is permissibility cited by scholars to deduct one year's worth of repayments. However, ideally, this deduction should only be made if paying Zakat will impact your ability to repay the debt. If the Zakat payment does not impact your ability to repay your debt, we encourage that the deduction is not made. The reason for this is that the philosophy of deducting de
Deducting Tax bill and Council tax
Q: I currently have a tax bill due in January 2018, being self employed. Would I take this out as an expenditure for my Zakatable wealth. I also have £1,200 of council tax to pay over the next year, would I take this out as an expenditure for my Zakatable wealth? A: If the tax bill has been incurred and is payable in January 2018, you may deduct that amount. You can deduct the council tax bill also. And Allah knows best! Mufti Faraz Adam
Do I need to deduct my student loan from my saving before I calculate the 2.5% Zakat?
Student loans should not be deducted for Zakat purposes. Any personal debts can be deducted. By personal loan here, we mean a loan between friends/family that is recallable at any time, meaning that let's say your friend lent you £500 and said you could pay it back in six months’ time, they could still come back at any time to demand it from you immediately. Such loans are deductible from the Zakatable assets of the debtor and are added to the Zakatable assets of the creditor before Zakat is p
Can I deduct the the monthly payment I make in an interest only mortgage?
Q: I would like to know whether I have to pay Zakat on money that is in my account that offsets my mortgage i.e. I have an offset mortgage which means I only pay interest on the slice of debt above my saving balance. Jzk A: Zakat is due on the money in the savings account. And Allah knows best! Mufti Faraz Adam
I have a personal loan taken from my brother. Do I deduct the amount from my Zakat calculation?
We have now changed our position in relation to the treatment of personal loan in the Zakat calculation. Our current ruling is the following: any personal debt that will be repaid in the forthcoming 12 lunar months can be deducted. If you have the intention to repay the loan or some of it then you can make the deduction, however, if despite making the deduction you do not make the repayment, then on the following year you will have to make the adjustment to your Zakat payment and pay Zakat on
Deducting mortgage repayment of houses bought for rental income
Q: I had a quick question in relation to payment of Zakat and mortgage deductions. I am aware that you can make deductions for capital payments of a mortgage and not the interest. However what if they are rental properties? does this still apply or can you not deduct from your calculated amount? A: Mortgages on rental properties can also be deducted minus the interest. And Allah knows best! Mufti Faraz Adam
Can I deduct the remaining balance I have to pay towards the cost of going to Hajj?
Q: My wife and I will InshaAllah be going Hajj this year. I have paid the deposit for this already. Is Zakat eligible on the remaining amount? A: If the places have been booked and deposit paid, then the remaining balance is not Zakatable and therefore you can deduct from the Zakat calculation the amount you owe to the Hajj tour operator. And Allah knows best! Mufti Billal Omarjee
Deducting "committee" money from the Zakat calculation
Q: We in the Muslim community have a savings account which we call (committee)just an example if for instance I'm paying into that and i receive a lump sum because my number was for example say 5 before the savings finish and i am still paying until number 80, do I have to pay Zakat on the lump sum i have received. jazakallah. A: First of all one must ensure that they make a note of how much they are contributing and how much they have taken away by the time the Zakat calculation comes. S
Can I deduct a bank loan from Zakat calculation?
If interest is involved, such a loan is prohibited in sharia. However, if a business borrowed money from a bank, only the capital repayments can be deducted and not the interest element of the forthcoming lunar year. And Allah knows best! Mufti Faraz Adam
Deducting child maintenance from Zakat calculation
A: Child maintenance can be a requirement of shariah or a requirement of the law of the country. If a person is required by shariah to provide child maintenance, then there are two possible scenarios: __1) From a legal perspective (i.e. decisi
Do I have to deduct the tax liabilities from the calculation of Zakat?
With regards to debt deductions, there is permissibility cited by scholars to deduct one year's worth of repayments. However, ideally, this deduction should only be made if paying Zakat will impact your ability to repay the debt. If the Zakat payment does not impact your ability to repay your debt, we encourage that the deduction is not made. The reason for this is that the philosophy of deducting debts was based on Zakat payments affecting your ability to repay the debt and in turn, put you in
Deducting student loan from Zakat calculation
Q: I have a student loan. Would this count as a liability? A: If you are not currently repaying your loan, it is not deductible. If you are repaying your loan, only 12 months worth is deductible. And Allah knows best! Mufti Faraz Adam
Joint liability in Zakat calculation
Q: I understand that assets need to be owned individually to work out debt (e.g. our shared account is now considered my account), but I was wondering if the same applies to debt. As a couple we have had debt for a few years, including owing family members and a mortgage. Does that debt need to be attributed to one of us or is it a shared debt? If it needs to be attributed to an individual, can we split it between us? Jzk for taking the time to do all this, you are doing the Ummah a great servi
Deducting mortgage repayment of the house bought for personal use
A: You can deduct 12 months worth of repayment minus the interest. And Allah knows best! Mufti Billal Omarjee
Zakat on the remaining balance of a paid contract
Q: I am currently buying a property. I am getting the help of my father and we have agreed a TP1 contract with the builder whereby we have already paid a deposit of £150000. Upon the completion of the property in July, we will pay a further £275,000. Do we have to pay zakat on the £275000 which is still to be paid? Jazakallah A: Zakat is not due on the remaining balance. It is a debt which can be deducted. And Allah knows best! Mufti Faraz Adam
A: Anything which became outstanding prior to your Zakat day which you haven't paid yet. And any bills that is due to be paid in the same month of your Zakat day e.g. if your zakat day is on the 15th and you have a bill that will be debited from your account on the 25th. And Allah knows best! Mufti Bil
Deducting a car loan repayment
A: You can deduct up to one year worth of the loan repayment after interest. And Allah knows best! Mufti Billal Omarjee
A question concerning self-employed people
A: You can make a deduction regarding the liability related to the previous tax year. As an example of your zakat is due today you can deduct the tax that you need to pay for the April 2017/2018 tax year. And Allah knows best! Mufti Billal Omarjee
Zakat on money set aside to make a voluntary donation (i.e. sadaqah)
A: You will have to include it into your calculation as this is not a liability. And Allah knows best! Mufti Billal Omarjee
Credit card liability for Zakat purpose
A: You can deduct the amount you owe and will be repaying within the next 12 month. you cannot deduct the amount of credit which you haven't used. And Allah knows best! Mufti Billal Omarjee