Is zakat obligatory on a sum of money that has been in the possession of another person for a full year, exploited by him in trade without the knowledge of its owner, who believes it is still merchandise he owns, and is zakat obligatory on the original owner or on the possessor?

Goods purchased on credit are considered debts, and the preponderant opinion is that debt is deducted from zakat (definition) funds. The value of the existing money and goods is calculated, then debts (including the unpaid price of the goods) are deducted. Zakat is then paid on the remainder if it reaches the nisab (definition). This is the view of the majority of scholars, who hold that debt prevents the obligation of zakat on hidden assets if it consumes the nisab or reduces it. However, if the zakat payer possesses goods for acquisition that he does not need, he should set them against the debt and pay zakat on the money he possesses.

It is important to note two matters regarding deferred transactions: 1. The term of deferment must be known, otherwise, the contract is invalid. 2. There is no harm if the merchant accepts the return of part of the goods. This is considered a recommended annulment (iqalah), based on the Prophet's (peace be upon him) saying: "Whoever annuls a transaction for a Muslim, Allah will annul his stumble."