Question Summary:
I have to pay a bank loan of Rs. 1.700 million for which I have mortgaged my house…Now I have no other way to get rid of this loan until unless I get the mortaged amount from any Halal source or pay installments every month. Please guide that should I mortgage my…

Question Detail:

My First question is about Zakat.  I have to pay a bank loan of Rs. 1.700 million for which I have mortgaged my house.  I have Rs. 50,000 in the shape of cash as well as almost 40 Tola of Gold.  Someone has told me that I am not eligible to pay Zakat as my liablility is higher that what I owe.  Please guide me what should I do?

My second question is that at the time of mortgaging my properity I wasn't aware that it is a big sin to get invovled in the matters of Riba.  Now I have no other way to get rid of this loan until unless I get the mortaged amount from any Halal source or pay installments every month.   Please guide that should I mortgage my properity to any islamic bank under islamic finance scheme or should I sell my house and pay off the debt.  I have no other properity to shelter my family.
Please guide...
best regards.
Ali

Answer :

In the name of Allah, Most Gracious, Most Merciful
Assalaamu `alaykum waRahmatullahi Wabarakatoh
1) Zakaat will be wajib (compulsory) upon a person who possesses the amount of nisaab, over and above his basic needs and after fulfilling his debts.
If a person had so much debt that if he had to fulfil the debt, he would have a remainder of wealth which is equal to or more than the nisaab, then zakaat will be wajib on the remainder of the wealth.
If the loan is such that it engulfs the whole wealth, or the remainder of the wealth after fulfilling the debt is less than the nisaab, then zakaat will not be wajib.
هي تمليك مال مخصوص لشخص مخصوص فرضت على حر مسلم مكلف مالك لنصاب من نقد ولو تبرا أو حلييا أو آنية أو ما يساوي قيمته من عروض تجارة فارغ عن الدين وعن حاجته الأصلية ولو تقديرا .
(Hashiyat-u-Tahtawi ‘ala Maraqil Falah Pg.715 – Darul Kutub Al Ilmiyyah)
Bahishti Zewar Ch.3 Pg.23 (Maktabah Thanvi Deoband)
However, the ruling will be different in the case of long term debts that exceed the time period of one year. In such situations, the amount owed for one year will be calculated, and only that amount will be considered when applying the rules of zakaat. I.e. if the remainder of the wealth were to exceed the nisaab after fulfilling this amount, then zakaat will be wajib; and if this amount engulfs the remainder of the wealth or the remainder of the wealth after fulfilling this amount is less than the nisaab, then zakaat will not be wajib.
Jadeed Fiqhi Masail Vol.1 Pg.213 – Kutub Khana Na’eemiyah
2) Indulging in Riba is a major sin, and one should try to disengage himself from such transactions as soon as possible. You could take assistance from an Islamic bank to pay off the debt. If the last resort is to sell the house, then the house should be sold and an accommodation on rent could be organized. The repercussion in the hereafter is far greater than the hardships of this world.
And Allah knows best
Wassalam
Ml. Abu Yahya,
Student Darul Iftaa
Checked and Approved by:
Mufti Ebrahim Desai
Darul Iftaa, Madrassah In'aamiyyah