Q: 145 – Title: Can a loan be converted to Zakaat and do you have to specify while giving Zakaat that it's Zakaat?

Question

One of my friends had given a loan to his relative. The relative has intentions of repaying the loan, but his economic condition is very bad and he cannot repay anything. So my friend wants to forgo the loan and convert it into Zakaat next year.

1. Can he do something like that?

2. I heard from my elders that when you give somebody zakaat you have to inform them from before that this is zakaat money. Is that true?

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salamu ‘alaykum wa-rahmatullahi wa-barakatuh.

1.) He cannot just forego the amount given previously and convert it to Zakaat, because his intention at that time was to offer a loan, not Zakaat.

If his relative is deserving of Zakaat, your friend can follow the following method to discharge his Zakaat and recover his loan at the same time:

a.) Give his relative the Zakaat money that is currently due on him or will be due on him. This amount would be equivalent to the amount of the loan he had previously loaned to his relative.

b.) The relative would then become the owner of that Zakaat money. He does not have to use that money to pay off the loan. If he returns the money voluntarily back to your friend his own debt will be discharged. The Zakaat of your friend will also be fulfilled in this way, and he will have recovered his original loan amount as well. [i] [ii]

2.) No, you don't have to inform the recipients of Zakaat that this is Zakaat money. You can give it as a gift, so long as you have an intention in your mind that it's Zakaat.[iii] [iv] [v]

And All?h knows best.

Ml. Sohail Bengali
Chicago, IL (USA)

Concurred by:

Mufti Abrar Mirza
Chicago, IL (USA)

Under the Supervision of Mufti Ebrahim Desai (South Africa)

فتاوى محمودية كتاب الزكاة، ??/ ??? كتب خانة مظهري [i]

آب كي مسائل أور أن كا حل، ?/ ??? مكتبة لدهيانوي [ii]

آب كي مسائل أور أن كا حل، ?/ ??? مكتبة لدهيانوي [iii]

قوله ( ولا يشترط علم الفقير أنها زكاة ) ولو دفعها إلى صبيان أقربائه [iv]

برسم عيد أو إلى مبشر أو مهدي الباكورة جاز إلا إذا نص على التفويض

حاشية الطحطاوي على مراقي الفلاح، كتاب الزكاة: ص. ??? دار الكتب العلمية

Contemporary Fataawa, pg. 83, Idara-e-Islamiat [v]