He would have to give zakat only if the amount that remains after subtract the ‘total installment for a year’ from total wealth is more than the amount of nisab (85 grams of gold, or 595 grams of silver, or equal amount of money or commodities), and if he still have been holding that wealth for one lunar year. It is important that his total installment debt for a year, rather than the whole debt amount is subtracted from his wealth. Here is why:
It is a fact that debt is subtracted from wealth when total wealth and its zakat are calculated. Being paid in installments or at once does not change the fact that it is a “debt”. In the Qur’an, in the specific verse about the sharing of inheritance (an-Nisa 4:11), the wealth of the deceased and the shares of heirs are calculated after all of his debts are subtracted from his wealth. Considering this, you will need to pay zakat for every year (every haul), does, only the installment for that year is allowed to subtract because it is considered as needed in that year.
For this reasons, the total installment debt for a year must be subtracted from the wealth in order to calculate the zakat; thus zakat is 2.5% from that remaining balance.
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