Do you owe zakāh on money that is owed to YOU?

THE QUESTION EVERY LENDER, SAVER AND RECEIVABLE-HOLDER HITS. You compute zakāh on what you own. But what about money that is owed TO you — a loan you extended, a deferred sale price, a receivable, cash a solvent friend is holding? It is yours, yet it is not in your hand. Does it count as a zakāh-liable asset this year, or only when it comes back? The OIC International Islamic Fiqh Academy answered this in the very FIRST resolution it ever issued a number to — Resolution No. 1 (1/2), 'Zakāh on Debts' — adopted at its second session in Jeddah in December 1985.

WHY THE ACADEMY HAD TO RULE AT ALL. The preamble is candid that this is contested ground. In the official edition the Council records that 'There is no apparent reference in the Quran or the Sunnah elaborating in detail the rulings concerning Zakāh on debts', that 'Several opinions of the Companions and their Followers (Ṣaḥābah and Tabiʿūn) ... have been reported on the method of paying Zakāh on debts', that 'The Islamic schools of jurisprudence have differed clearly on the subject', and that the disagreement traces to one fundamental principle: 'whether receivable assets can actually be classified as received.' (IRTI edition: 'There is no statement in the Book of Allah, Almighty, or the Sunnah of His Messenger (PBUH), elaborating (rules of) Zakat on Debts'; 'Numerous views have been reported from the Companions and the Tabe'een'; 'the Islamic Schools of Jurisprudence have differed clearly'; the root question being 'whether receivable assets can be classified as actually received assets.') In other words, the whole matter turns on whether a receivable is 'as good as in hand' — and the Academy answered by splitting the question on the debtor's situation.

WHAT IT RESOLVED — TWO POINTS. Verbatim (official): 'Resolves: 1. Zakāh of debt is due on the owner of the debt, for each year, if the debtor is solvent and giver. 2. Zakāh of debt is due on the owner of the debt, after the lapse of one year from the day of receipt if the debtor is insolvent or procrastinating.' (IRTI edition: 'The Council RESOLVES THE FOLLOWING: 1. The lender is obligated to pay Zakat, every year, on his loaned money, if the borrower is solvent. 2. The lender is obligated to pay Zakat, after the elapse of one year starting from the day he actually receives his loaned money, if the borrower is impoverished or controverting.') Two situations, two rules.

RULE ONE — THE SOLVENT, WILLING DEBTOR: PAY EVERY YEAR. If the person who owes you can pay and (in the official edition's wording) is a 'giver' — solvent and forthcoming — then the debt is treated as effectively within your reach, and you owe zakāh on it EACH year, alongside the rest of your zakātable wealth, even before you collect it. The reasoning is intuitive: money you can call in at will is, for zakāh purposes, close enough to money in your hand. (The IRTI edition states the solvency condition but does not carry the official edition's added 'and giver' qualifier — a genuine difference noted below.)

RULE TWO — THE INSOLVENT OR STALLING DEBTOR: PAY ONCE, AFTER YOU RECOVER IT. If the debtor is 'insolvent or procrastinating' (official) / 'impoverished or controverting' (IRTI) — cannot pay, or can but won't — then you are NOT charged zakāh year after year on money you may never see. You owe zakāh only 'after the lapse of one year from the day of receipt' (official) / 'after the elapse of one year starting from the day he actually receives his loaned money' (IRTI): that is, once the money is actually back in your hand, you pay for one year, then continue normally from there. A defaulted or frozen receivable does not keep bleeding an annual zakāh charge on wealth you do not effectively control.

HOW A RIBA-FREE MUSLIM ACTUALLY USES THIS. (a) Personal loans you made: if the borrower is solvent and reliable, add the loan to your zakātable assets and pay 2.5% on it each year (the RATE itself comes from the general zakāh rules / Resolution No. 2, not from this resolution). If the borrower is broke or dodging you, park it — zakāh falls due only after you recover it, for one year. (b) Deferred sale prices / trade receivables owed by solvent counterparties: same as a solvent debt — zakātable annually. (c) Money you cannot access — a genuinely bad debt, funds trapped with an insolvent party: no annual zakāh until (and unless) it is recovered. (d) Do not over-read it: Resolution 1 settles WHETHER and WHEN a debt owed TO you is zakātable and on WHOM (the creditor). It does not set the zakāh rate, does not rule on debts you OWE (deductibility of your own liabilities is a separate question), grades no product, and names no figure.

WHERE THIS SITS IN THE CORPUS — THE FOURTH ZAKĀH ANCHOR. The corpus now carries four OIC zakāh resolutions that together trace the whole arc. Resolution No. 2 (2/2) fixes that you tax the YIELD of an income-producing asset, not the asset itself. Resolution No. 28 (3/4) applies that to a SHAREHOLDER (pay on the dividend / trading value, not the mere holding). Resolution No. 15 (3/3) governs how a zakāh institution may DEPLOY collected funds (invest, under conditions). And Resolution No. 1 (1/2) — the earliest of the set — governs RECEIVABLES: whether and when money owed TO you carries zakāh. For anyone with loans out, deferred receivables, or debt-like holdings, this is the primary-source rule that tells them what to include in the zakāh base and when.

GENUINE DIFFERENCES BETWEEN THE TWO EDITIONS (disclosed, not smoothed). The translations agree on the two-point split while differing in wording and, on one point, in a dated fact. THE HIJRI MONTH — a real divergence, NOT adjudicated here: official 'holding its 2nd session in Jeddah, Saudi Arabia on 10–16 Rabīʿ al-Awwal 1406H (22–28 December 1985)' versus IRTI 'during its second session, held in Jeddah (Kingdom of Saudi Arabia), from 10 to 16 Rabiul Thani 1406 H (22-28 December 1985)' — the editions name DIFFERENT Hijri months (Rabīʿ al-Awwal / Rabīʿ I versus Rabiul Thani / Rabīʿ al-Thani / Rabīʿ II) while agreeing on the identical Gregorian week; picking a 'correct' month would be exactly the smoothing the no-fabrication rule forbids, so both are reported and neither is asserted over the other. CREDITOR FRAMING: official 'Zakāh of debt is due on the owner of the debt' versus IRTI 'The lender is obligated to pay Zakat ... on his loaned money'. THE SOLVENCY QUALIFIER: official 'if the debtor is solvent and giver' (two conditions — able AND forthcoming) versus IRTI 'if the borrower is solvent' (IRTI omits the second qualifier). THE FAILURE CASE: official 'if the debtor is insolvent or procrastinating' versus IRTI 'if the borrower is impoverished or controverting'. THE TRIGGER FOR RULE TWO: official 'after the lapse of one year from the day of receipt' versus IRTI 'after the elapse of one year starting from the day he actually receives his loaned money'. HEADER/TITLE: official 'Resolution No. 1 (1/2) / Zakāh on Debts' versus IRTI 'RESOLUTION N° 1 (1/2) / CONCERNING / ZAKAT ON DEBTS'. ACADEMY NAME: official 'the International Islamic Fiqh Academy of the Organization of the Islamic Conference' versus IRTI 'the Islamic Fiqh Academy'. PREAMBLE VERB 1: official 'Having examined the research papers submitted to the Academy concerning Zakāh on Debts' versus IRTI 'Having looked into the studies presented about << Zakat on debts >>'. PREAMBLE VERB 2: official 'Having listened to the in-depth discussions on the subject from different perspectives' versus IRTI 'After thorough discussions which covered the subject from its different aspects'. EVIDENT-POINT 1: official 'There is no apparent reference in the Quran or the Sunnah' versus IRTI 'There is no statement in the Book of Allah, Almighty, or the Sunnah of His Messenger (PBUH)'. THE FUNDAMENTAL PRINCIPLE (point 4): official 'whether receivable assets can actually be classified as received' versus IRTI 'whether receivable assets can be classified as actually received assets'. RESOLVES LEAD-IN: official 'Resolves' versus IRTI 'The Council RESOLVES THE FOLLOWING'. CLOSING invocation: official 'Indeed, Allāh is All-Knowing.' versus IRTI 'Verily, Allah is all-knowing'. SPELLING throughout: official 'Zakāh' versus IRTI 'Zakat'. Every verbatim quote used above was checked against both source PDFs (line-wrap, hyphenation, inserted-page-number and diacritic aware, whitespace-normalised).

AN HONEST NOTE ON WHAT IS AND IS NOT HERE. This is a settled operative statement (the Council 'Resolves' two points), not a deferral. It fixes that zakāh on a debt owed to you falls on YOU, the creditor; that a solvent (and, per the official edition, willing) debtor's debt is zakātable EACH year; and that an insolvent or stalling debtor's debt is zakātable only after you actually recover it, then for one year. It does NOT set the zakāh rate (the 2.5% is fixed elsewhere, e.g. Resolution No. 2), does NOT address the deductibility of debts you owe, grades no product, and names no figure. The quoted parts are the resolution's own words in the two editions; the framing question ('do I owe zakāh on money owed to me?'), the two-rule breakdown, and the how-to are plain restatements and honest applications of the resolution's own two operative points, not new rulings added by this site. The resolution cites no specific Qur'an verse and no hadith number, records no madhab tally and no vote count, so none is reported here. The one dated fact on which the editions genuinely disagree — the Hijri month of the session — is reported in both forms and left un-adjudicated.