Is it permissible to give Zakat to a female cousin (daughter of a maternal aunt) to pay off her debts and provide for her household needs, and is Zakat obligatory on borrowed money that has been in one's possession for a full year (Hawl)?

There is no objection to paying zakat to your cousin (daughter of your maternal aunt) if she is poor and her husband's income is insufficient for her needs, or if she is indebted and unable to repay; this is because the poor and the indebted are among the rightful recipients of zakat. Paying zakat to her is better than paying it to an stranger, and it is best to hand the money directly to her.

As for the money that was borrowed, it has become part of your wealth, and thus you pay zakat on it along with your other assets. However, scholars have differed on the zakat concerning such money, with two main opinions:

1. Zakat is not obligatory on it if the debt consumes all of one's wealth, or if no zakatable amount (nisab) remains after the debt is accounted for. This is the view of the majority of jurists.

2. Zakat is obligatory on it. This is the new opinion of Imam Al-Shafi'i.