Can Non-Current Liabilities Be Deducted for Business Zakat?

When calculating Zakat for your business, only a specific portion of long-term and non-current liabilities can be deducted. 

For Zakat purposes, you can deduct the portion of these liabilities due within the next 12 months. This means you can only subtract the current installments of long-term debts, not the entire outstanding balance.

For example:

If your business has a mortgage or a business loan, you can only deduct the amount that is due to be paid in the upcoming lunar year, which is typically within 12 months. If the total loan is due over several years, you cannot subtract the full loan amount from your assets. 

Instead, you would only deduct the portion of the loan that is due for repayment within the next year. This ensures that Zakat is calculated based on the actual liabilities that will need to be settled soon.

Key points to remember:

• Only current installments: You can only deduct the portion of long-term debts due within the next lunar year.
• No future payments: Installments due beyond 12 months cannot be deducted from your assets for Zakat.
• Focus on the short-term: Deduct only the liabilities that are due within the coming year, not the full outstanding balance.

Therefore, it’s important to focus on the current liabilities for accurate Zakat calculation. This ensures that you are paying the correct amount based on your actual financial obligations.

And Allah knows best!