Does debt prevent the obligation of Zakah on apparent wealth?
Chapter on Zakat on Crops and Fruits
Al-Mughni
Book of Zakat
Primary text
If the yield remaining after paying Kharaj does not meet the threshold for Zakah (Nisab), then no Zakah is due. Debt prevents the obligation of Zakah on apparent wealth (like Kharaj) in the same manner it prevents Zakah on hidden wealth, because Zakah is an obligatory due (Wajib). Furthermore, debt prevents the obligation of the Ushr (Tithe) just as the Kharaj and the necessary expenses of cultivation do. This is supported by one narration from Ahmad ibn Hanbal.
Supporting text
A second narration attributed to Ahmad suggests that all outstanding debts should be accounted for, and if the remainder reaches the Nisab, the Ushr is extracted from that remainder. This view differentiates from the first by noting that expenses related to cultivation are inherently offset against the yield, essentially meaning they were never truly gained, whereas the general debt is treated as an offset against all wealth.