Q: If you have outstanding debts does this impact on what Zakat you pay?
With regards to debt deductions, there is permissibility cited by scholars to deduct one year’s worth of repayments. However, ideally, this deduction should only be made if paying Zakat will impact your ability to repay the debt. If the Zakat payment does not impact your ability to repay your debt, we encourage that the deduction is not made. The reason for this is that the philosophy of deducting debts was based on Zakat payments affecting your ability to repay the debt and in turn, put you in harms way. When a person is not in harms way at all by paying Zakat despite having debt, then the debt ought not to be deducted.
Reviewed on 23/11/2021