Tuesday | 20 October 2020 | 3 Rabiul-Awal 1442
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Fatwa Answer

Question ID: 635 Category: Knowledge
Farziyat of Zakaat While in Debt

As'salaamu Alaikum.

I have a franchise motel in Atlanta USA which has a $3 million dollar loan.  I have $1 million cash in bank account, but the bank is not willing to take partial payment on the loan.
 
I need to know the ruling of Zakat when involved in interest.  Can I give Zakat using the cash I have in bank?  Also, is Hajj and Qurbani allowed in this situation?  Please advise.
 
Jazakallah Khair,

الجواب وبالله التوفيق      

The first thing for a person involved in an interest-based loan is to repent for taking the loan in a Haraam manner and make firm intention not to commit this sin in the future.

After that the amount of this loan should be deducted from one’s total savings. If the resulting amount reaches the Nisaab-e-Zakaat then he should pay the 40th part of this remaining amount as Zakaat. If the resulting amount does not reach the value of Nisaab-e-Zakaat, then Zakaat is not wajib on this person from a Shar‘ai standpoint.

Therefore, you should make every effort possible to first of all pay this loan off. Once you are free from the loan and you have the financial capacity for Hajj and Qurbani, you should perform Hajj and Qurbani.

Note: The Zakaat Nisaab is 7 ½ Tola Gold or 52 ½ Tola Silver or Cash equivalent to the price of 7 ½ Tola Gold or 52 ½ Tola Silver.

واللہ اعلم بالصواب