Question: I got into a housing debt and I have gold more than 85 grams. How shall I calculate my zakat?
You would have to give zakat only if the amount that remains after you subtract your total debt from your 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 you have been holding that wealth for one lunar year. It is important that your total debt, rather than your next installment is subtracted from your wealth. Here is why:
1- 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, there is no mention of the due dates or number of installments about debts. C0nsidering this, even though you are alive while paying the installment of this month, there is no guarantee that you will stay alive until the next one. It is certain that the debt will be collected from you or your heirs, but it is not for sure that you will have enough money to pay your next installment. The money you owe is not your money anymore, even though you pay it in installments.
2- The debt being divided into installments is only a favor done by the creditor. Even though you have made an agreement, most of the debt agreements, especially those of mortgage, include an article which allows the creditor to demand the total owed money any time they find necessary. This is how even huge companies may be compelled to go bankrupt in a short period. Many instances of such bankruptcy occurred in many countries in the past.
For these reasons, the total debt must be subtracted from the wealth in order to calculate the zakat.
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