Question:

If I have put a director’s loan into my company, do I have to still pay zakat on that loan?

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

The Answer:

Loan receivables are Zakatable assets. Although Zakat is not payable immediately before receiving it, you can still pay Zakat on the outstanding amount each year. However, if you decide not to pay at the current time, it will be necessary to pay Zakat on the loan upon receipt for each outstanding year.

In respect to your company’s Zakat calculation, the loan will be treated as a current liability and deductible from your gross Zakatable assets value.

And Allah Ta’ālā Alone Knows Best

Mufti Faraz Adam,
www.darulfiqh.com 

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