8 min read
Yes, a bank loan can generally be deducted from your Zakat calculation.
Zakat is based on your net wealth, which is the total value of your assets minus your liabilities. Therefore, the amount you owe on your loan can be subtracted from your assets before calculating your Zakat.
Here are the key points to consider:
Thus, while you can deduct the outstanding loan principal from your assets, you cannot deduct the interest. Additionally, you can account for one year’s loan repayments to make the Zakat calculation fair and manageable.
And Allah knows best!
WRITTEN BY
Atta-ur-Rehman
Atta-ur-Rehman, a specialist in Fiqh from Fazal-Jamiat-ul-Uloom-ul-Shariah, Jama'at ul-Umar Karachi, is an expert in Islamic jurisprudence. His expertise spans various aspects of Shariah, including Zakat, financial rulings, family laws, and ethical guidance in everyday life. With a deep understanding of Islamic principles, he provides a reliable insights into matters of faith, worship, and personal obligations.