Does debt prevent the obligation of Zakat on apparent wealth (like livestock, grain, and fruits)?
Chapter on Zakat on Debt and Charity
Al-Mughni
Book of Zakat
Primary text
Debt prevents Zakat on apparent wealth according to one narration from Ahmad, based on the reasoning applied to hidden wealth. Ahmad, in the narration of Ishaq ibn Ibrahim, stated that one must first pay off debt, and then Zakat is due only on what remains after necessary expenses (nafaqah). This view is held by 'Ata, al-Hasan, Sulayman, Maymun ibn Mihran, al-Nakha'i, al-Thawri, al-Layth, and Ishaq, based on the generality of the textual evidences cited for hidden wealth. However, other narrations from Ahmad suggest debt does not prevent Zakat in these assets, aligning with the position of Malik, al-Awza'i, and al-Shafi'i.
Supporting text
A narration from Ahmad indicates a difference between Ibn 'Umar and Ibn 'Abbas: Ibn 'Umar held that one deducts debt incurred or expenses spent on the harvest and family, and pays Zakat on the remainder. Ibn 'Abbas held that one only deducts debt specifically incurred for the harvest and pays Zakat on the remainder. The opinion adopted is that debt incurred specifically for the harvest expenses does not prevent Zakat on the crop itself, but debt generally does not prevent Zakat on livestock.