Fiqh-us-Sunnah Volume 3, Zakaat and Fasting, Fiqh 3.015.

Debts are of two kinds:

1. A debt which is acknowledged by the debtor with the willingness to pay it off, and

2. A debt which is not acknowledged either because the borrower is insolvent or its payment is deferred.

In the first case, scholars have formed the following views:: The first view:

‘Ali, ath-Thauri, Abu Thaur, the Hanafiyyah, and the Hanbaliyyah hold that the creditor should pay zakah on the debt, provided he has received it from the debtor, in that zakah will be payable retroactively.: The Second view:

‘Uthman, Ibn ‘Umar, Jabir, Tawus, anNakha’i, al-Hasan, az-Zuhri, Qatadah, and ash-Shaf’i hold that the creditor should pay zakah on the value of a debt owed on time, even though he did not receive it yet, since he is eventually going to receive it and use it. It is similar to the zakah of any deposited amount.: The third view:

‘Ikrimah, ‘Aishah, and Ibn ‘Umar hold that no zakah is due on debt since it does not grow. It is similar to the case of acquired assets.: The fourth view:

Sa’id ibn al-Musayyab and ‘Ata ibn Abu Rabah hold that zakah should be paid for one year if the debt is returned to the creditors.

2. For the second case, Qatadah, Ishaq ibn Abu Thaur, and the Hanifiyyah hold that its zakah is not compulsory on this type of debt, since the creditor cannot benefit from it. Ath-Thauri and Abu ‘Ubayd hold that on receipt (of it) the creditor should pay its zakah retroactively since it his and he may use it at his own free will, like the zakah on the debt of a rich person. The last two views are attributed to ash-Shaf’i. ‘Umar ibn ‘Abdulaziz, alHasan, al-Layth, al-Auza’i and Malik agree that he should pay zakah on it for only one year when he receives it.