Is Zakat Due on Money Lent with Delayed Repayment?

When it comes to the money you have lent to someone, the obligation to pay Zakat depends on whether you expect to receive the repayment or not:

• Zakat is due if you hope to receive the repayment:

If you still have a reasonable expectation that the borrower will repay the loan, Zakat is payable on the amount you have lent. This is because the money remains part of your wealth as long as you anticipate its return.

• Zakat is not due if you have lost hope of receiving the repayment:

If you no longer expect the borrower to repay the loan, Zakat is not payable on that amount. In such a case, the money is considered no longer part of your assets.

• Zakat is based on your actual wealth:

The purpose of Zakat is to purify the wealth you currently possess. If the loan is uncertain or unrecoverable, it will not be counted towards your wealth for Zakat purposes.

Hence, Zakat is required if the loan is expected to be repaid. It is not required if the loan is deemed lost or unrecoverable.

And Allah knows best!