Q: Do I have to pay zakāh on a deferred loan repayment? What is the ruling in relation to a loan resulting from the sale of personal property with payment deferred to a later date?
For e.g. an individual has purchased a new car and paid the price in full. He has sold his old car to an associate who will pay him after six months. How should the seller treat the outstanding amount for the purposes of zakāh?
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A: A debt that is generated by the sale of personal property is categorised as a ‘medial debt’.
According to the more correct and preponderant opinion of Imām Abū Ḥanīfah recorded by Ibn Sumāʾah on the authority of Imām Abū Yūsuf, liability of zakāh only applies after receipt of the quantum of zakāh liability and the passage of one lunar year from the time of possession. Thus, the seller of the car is not required to pay zakāh on the outstanding amount. However, if, in view of the opinion reported in al-Asl [zāhir al-riwāyah], the seller should still want to adopt a more prudent path of his own volition then he should consider the outstanding amount liable to zakāh from the time of sale. However, in this case, the obligation to pay zakāh will only mature upon possession of 200 dirhams (or the equivalent thereof).
For a detailed breakdown, please see The Categorisation of Debt for Zakah Purposes research paper on the Al Qalam website.