Zakat on Borrowed Money Held in Hand

Short answer: Yes — upon borrowing, the money becomes your property (that is the very point of a loan: you gain the right to spend it); despite the liability you owe, this wealth in hand owes zakat once nisab and hawl complete — the weightier evidence-based view (debt does not block zakat). The allowance to deduct the imminently due installment applies here too. Details: Is the same money zakated twice? No — the creditor pays on his receivable (a strong debt), you pay on cash in your hand; two distinct wealth positions of two people. And remember: borrowing at interest is haram; if you took a goodly loan, repay well and on time — 'the best of you are the best in repayment' (Sahih al-Bukhari 2393). Evidence: Quran 9:103; Sahih al-Bukhari 1395 (collection from apparent wealth without debt inquiry); Sahih al-Bukhari 2393; Shaykh al-Uthaymin that a debtor holding nisab pays zakat. For complex individual cases, consult a qualified scholar.