Quora Answer: Why is Debt Not Taken into Account When Calculating Zakat?

بِسۡمِ ٱللهِ ٱلرَّحۡمَـٰنِ ٱلرَّحِيمِ

The following is my answer to a Quora question: “Why is debt not taken into account when calculating zakat?

Zakat is calculated on your excess wealth, meaning funds and assets set aside, with no immediate use, not absolute net worth.  As such, it does not factor in debt in isolation.

When a person has wealth in excess of the nisab, it means that his debts are manageable.  Whatever he provisions to service debt is not “excess”, but an expenditure.  That amount is not factored in when calculating zakat.  If his debts are in excess of his assets, he is effectively insolvent, and does not need to pay zakat.


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