Ruling on Paying Zakat from Interest-Based Wealth

Author: Dr. Muhammad Zia-ur-Rahman Azmi (رحمه الله)

Is It Permissible to Pay Zakat from Interest-Based Money?​

1. Earning Through Interest (Riba) is Forbidden​

Engaging in interest-based transactions with banks or other institutions is strictly prohibited in Islam. Any wealth gained through interest (Riba) is unlawful and does not belong to the person who received it.

Since this money is haram, it cannot be used to pay Zakat or any other religious obligation. Instead, it should be disposed of by spending it in general public welfare projects, such as repairing public washrooms, roads, or other communal benefits.

2. If a Person Has Already Received Interest Money​

If a person has already collected interest money and later learned about its prohibition, then:

• They must dispose of it in charitable causes without the intention of earning reward.
• If they have not yet taken the interest money, they should only take their original capital and leave the interest behind.

Allah ﷻ commands:
"O you who believe! Fear Allah and give up what remains [due to you] of interest, if you should be believers."
[Surah Al-Baqarah: 278]

3. If Someone Collected Interest Money Before Knowing It Was Haram​

• If a person received interest before learning its prohibition, then that money is considered his property, and he is not required to dispose of it.
• This is based on Allah’s statement:

"Whereas Allah has permitted trade and forbidden interest. So whoever receives an admonition from his Lord and stops, then what has passed is for him, and his affair rests with Allah. But whoever returns [to dealing in Riba], those are the companions of the Fire; they will abide therein."
[Surah Al-Baqarah: 275]

4. Can Zakat Be Paid from Such Wealth?​

Zakat must be paid on all lawful wealth that reaches the Nisab (minimum threshold for Zakat).
Zakat cannot be paid from haram money, including money earned through interest.

Any money that was lawfully acquired before learning about the prohibition of Riba is subject to Zakat, just like any other halal wealth.

[Shaykh Ibn Baz: Majmoo’ al-Fatawa wal-Maqalat, 19/135]