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Deducting loans in zakaah, including tax refunds

Fatwaa ID: 810

Question:
Asalaamu alaykum wrwb

Question about zakat:
If one has a shariah complaint mortgage, do they have to subtract 12 months of mortgage payments from their total or only one month (ie the month that they’re paying zakat)

Does one have to include their tax refund as part of their zakatable income if received few weeks before their zakat date?

Jazakallahu khairan

Answer:
In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.

  1. In principle debts and loans are deductible from one’s total zakaah calculation. However, in regards to long term non-personal loans, only that amount which is payable in the next twelve lunar months (one year) from one’s zakaah date will be deductible. This is the preponderant position. Some contemporary scholars hold the view that only the amount payable in the following month may be deducted.
    In regards to Shari’ah compliant mortgages and zakaah deductions, this will depend on the module of Islamic financing used. In some cases, you may not be deducting anything as it is not a loan, rather a partnership. You may revert to us with details and we will advise accordingly.
  2. Any and all zakaatable wealth owned on one’s zakaah date is subject to zakaah, even if you acquired it the previous day. It is not necessary for a year to pass on each and every single dollar. In the enquired situation, the tax refunds you received a few weeks before will be included in your zakaah calculation.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York
https://askthemufti.us/

08/18/1444 AH – 03/10/2023 CE | AML1-7260

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين

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