Understanding Immediate Debts

Debts due within one year. Immediate debts include: credit card balances due, personal loans with payments in the next 12 months, rent or bills owed, and money borrowed from family or friends that must be repaid soon. The key factor is timing. If the debt must be paid within the next lunar year, it can be deducted from your zakatable wealth before calculating Zakat. This ensures Zakat is only paid on wealth that is truly surplus.

Subtract the debt from your total wealth. On your Zakat date, calculate your total zakatable wealth (cash, gold, investments, etc.). Then subtract any immediate debts you owe. The result is your net zakatable wealth. Apply 2.5% to that amount. For example: You have £15,000 in savings, £5,000 in gold, and £2,000 owed on a credit card due next month. Your total assets are £20,000. After deducting the £2,000 debt, your net wealth is £18,000. Your Zakat is £18,000 × 0.025 = £450.

Islam does not burden those in genuine financial difficulty. If you owe money that must be paid soon, Islam recognizes that this reduces your financial security. The debt is a claim on your wealth, so it is fair to deduct it before calculating Zakat. However, Islam also prevents people from using debt as an excuse to avoid Zakat. This is why only immediate, genuine debts can be deducted. Long-term debts that are spread over many years do not have the same urgency and cannot be fully deducted. info Credit Card Balances