Q: I wanted to ask regarding Zakat. Let’s say a person had £20,000 and someone than borrowed money off him. Time has come for him to pay zakat and at the same time it comes to his attention that the person who borrowed his money can’t pay it off and also is in need. Can the lender than pay his Zakat by letting the person keep the money as he is need. Can he class as his Zakat paid?
A: It is not permissible to waive the debt that someone owes you instead of making a Zakat payment. This is irrespective of whether the debtor is eligible themselves to receive Zakat or not.This is the opinion of the Hanafis, the Hanbalis and Malikis too. Imam Nawawi (ra) mentioned it to be the most correct opinion within the Shafi’i school of jurisprudence.
Some scholars such as the maliki scholar Ashhab (ra), Ibn Hazm (ra) and contemporary scholar Dr Yusuf Qardhawi do believe that waiving debts as payments of zakat is permissible.
And Allah knows best!
Mufti Billal Omarjee