Q: Can a lender waive debt off on the Zakat anniversary date, and treat it as Zakat?
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!
Reviewed on 31/01/2022