Can You Waive the Debt and Count It as Zakat?

Scholars have two opinions on this question. Shaykh Wahid Abdus Salam Bali himself abandoned his earlier view and returned to the second opinion — when you hear the reasons, you will understand why.

How the Question Comes Up

You lent money to someone, or sold goods on credit — and an instalment is still outstanding.

Meanwhile the man's condition has become so bad that he himself is now eligible to receive sadaqah; people are helping him.

The year has turned and the time for your zakat has come. A question arises in your mind — can't I waive what is owed to me and count it as zakat?

Shaykh Bali says this is an important issue — one on which the scholars are divided into two groups.

The Shaykh's Answer

The Shaykh says — I used to state the view of Ibn Taymiyyah and Imam Ahmad; after research, the second opinion seemed far stronger to me.

The second opinion is that of Ata ibn Abi Rabah and Hasan al-Basri, may Allah have mercy on them — if the indebted man is poor and eligible for zakat, then it is permissible to waive what is owed and count it as zakat.

His reasoning — the man is eligible for sadaqah, yet we are stopping the giver. Moreover, those who forbid it are the very ones who say that if one hands over zakat and takes back the debt the next day, it is permissible — so where is the difference?

The Evidence — What the Prophet ﷺ Said

أُصِيبَ رَجُلٌ فِي عَهْدِ رَسُولِ اللَّهِ ﷺ فِي ثِمَارٍ ابْتَاعَهَا فَكَثُرَ دَيْنُهُ، فَقَالَ رَسُولُ اللَّهِ ﷺ: تَصَدَّقُوا عَلَيْهِ

In the time of the Prophet ﷺ, a man bought fruit and suffered a loss, and his debts increased. The Prophet ﷺ said — Give him sadaqah. (Sahih Muslim)Copy

In the Qur'an, the word 'sadaqah' itself is used in describing the eight categories of zakat — Surah At-Tawbah, verse 60. So the statement 'give him sadaqah' also includes obligatory sadaqah, that is, zakat.

What to Do

1. First make sure — whether the indebted person is truly in hardship and eligible for zakat.
2. Here, we are not talking about waiving the debt of someone who is well-off yet not paying, and counting it as zakat.
3. Do not use this path to cover a business risk — the intention is what really matters here.
4. This is an issue on which scholars differ — check with a trustworthy scholar in your own area.

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Source: Based on a talk by Shaykh Wahid Abdus Salam Bali

Translation and compilation: Raqi Faisal Ahmed Sabit — Al Quran Ruqyah Healing Center