Answered by Shaykh Yūsuf Badāt
Question:
I would like to give $1000 in loan to an Islamic organization. The organization promises to return the money to me after one year. Is it permissible for me to ask them to pay my zakāh for the $1000 loan on my behalf.
Answer:
In the Name of God, the Most Merciful, the Most Kind
May God bless you for your charitable works.
It is permissible to do the above. However, kindly note the following:
The money lent to someone is still the ownership of the one lending the money. Zakāh is obligated once in a year. The owner must pay Zakāh [2.5%] of the amount lent out.
Now if the creditor instructs the debtor who has burrowed the money to pay Zakah on his behalf, that is fine. However, when the money is returned to the creditor, the amount given as Zakah must be deducted.
(See: Fiqh Al Zakāh and Mukhtaṣar Al-Qudūrī)
And Allāh Knows Best
