Is it necessary to pay zakat on receivables?

In terms of zakat liability, receivables are divided into three categories:

1. Strong Receivables: These are receivables arising from money lent as a loan or the price of goods sold for trade. If the debtor acknowledges the debt or there is definite proof of the debt, the creditor must pay zakat on these receivables every year. If zakat for previous years has not been paid, it must be paid for those years after the receivable is collected.

2. Medium Receivables: These are receivables arising from the income of property not intended for sale, such as rent from a house. For these receivables, zakat for previous years becomes obligatory as well. However, the creditor must collect at least the nisab amount for the zakat obligation to be due.

3. Weak Receivables: These are receivables that do not represent the price of goods, such as those arising from bequests, mahr (dower), or blood money (diyah). Since these are not debts arising from an exchange of goods, zakat for previous years is not required. Once collected, zakat is paid after one year has passed over them. (Ibn Abidin, Reddü’l-muhtâr, 2/305; Mehmed Zihni, Ni‘met-i İslâm, 739, 740)

The creditor is not required to pay zakat each year on receivables that are denied or have no hope of being recovered. If such a hopeless receivable is later paid, zakat is only due for the year after it is collected; zakat for previous years is not required. (Marghinani, al-Hidaya, 1/96)

Source: T.C. Diyanet İşleri Başkanlığı, Din İşleri Yüksek Kurulu