وَمَنْ كَانَ عَلَيْهِ دَيْنٌ يُحِيطُ بِمَالِهِ، فَلَا زَكَاةَ عَلَيْهِ.
Translation: Whoever owes debt that encompasses his wealth is not liable to zakat.
Debt that encompasses wealth means a debt that absorbs the wealth being assessed for zakat. Where no unencumbered nisab remains, zakat is not due.
The rule is not a judgement about outward wealth; it gives effect to a creditor’s existing right against the property, leaving only the net remainder for assessment.
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The Book of Zakat: Obligation, Liability Conditions and Intention
وَمَنْ كَانَ عَلَيْهِ دَيْنٌ يُحِيطُ بِمَالِهِ، فَلَا زَكَاةَ عَلَيْهِ.
Translation: Whoever owes debt that encompasses his wealth is not liable to zakat.
Debt that encompasses wealth means a debt that absorbs the wealth being assessed for zakat. Where no unencumbered nisab remains, zakat is not due.
The rule is not a judgement about outward wealth; it gives effect to a creditor’s existing right against the property, leaving only the net remainder for assessment.