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Fatwa ID: 81891
Title: Zakat on loaned amount
Category: Poor-due or obligatory charity (Zakaah)
Scholar: Dr. Main Khalid Al-Qudah
Date: 07/17/2010

Question

Salaamu-alaikum warahmatullah, Do we have to pay zakat on money that we loan to the masjid for construction projects? The loan period on contract is for a period of 1 year (Ramadan to Ramadan). Jazak-Allah u khairan Wasalaaamu-alaikum


Answer

AAWW

You do not have to pay Zakah on what you lend to others till you actually get your money back. However, paying Zakah on the lent money is preferred, especially when paying off the loan is guaranteed.