I have Nani (mom's mom), non-working Mamu (70% mentally retired), non-working Khala (not divorced by left over by husband who is in Karachi), she is also suffering from mental disorder 50% about mentally retired and mamu's working daughter 23-years-old.
Their monthly earning is my nana before expiring left a piece of land which my nani sold and deposited Indian Rupees 400000 in bank and she gets Rs. 2500 interest per month with which she manages the expense of the family. My mamu's daughter has recently joined the job and is getting Rs. 2000/- she also gives her salary to nani. They leave in poverty since the total Rs. 4500 does not suffice their requirement i.e. food clothing medicines etc.
Now my question is? Can I pay Zakaat to nani (grandmother) as far as I know Zakaat cannot be given to Grandparents and Children? So some Islaamic scholar told me if you send i.e. 4000 to her and she spends 3000 on other 3 member and 1000 on her. Only Zakaat which I have paid is 3000. I agree to it. I send them money without telling that it is Zakaat money. Now, since mamu's daughter has started working can I give Zakaat to her is she mustahid for Zakaat, second thing I don't tell them that it is Zakaat is it right giving money to them without telling it is Zakaat. Can I pay Zakaat to them or not.
2nd question is I have a loan on flat which I stay of amount 200000 (a) and loan on car of amount 300000 (b). When I took flat and car I was not having money to buy out right. Now I have around 700000 (c). So on how much money I will have to pay Zakaat. i.e. c - a and b or on total money c. Please reply early since Ramadhaan is appearing and I have to pay Zakaat.

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.

First of all, we draw your attention to the fact that it is not permissible to benefit from the interest on money saved in banks dealing with Riba (i.e. usury and interest), as the Prophet cursed the consumer of interest and usury, and Allaah threatened him with war. Allaah says (what means): {O you who have believed, fear Allaah and give up what remains [due to you] of interest, if you should be believers. And if you do not, then be informed of a war [against you] from Allaah and His Messenger}[Quran 2:278-279]

Moreover, Jaabir narrated that the Prophet said: "Allaah has cursed the one who consumes Riba, the one who gives it to others, the one who records it and the one who witnesses it (its transaction).” The Prophet then said: “All of them are equal in sin.” [Muslim]

Therefore, your grandmother has to repent to Allaah from saving her money in banks that deal with usury and interest, and repent from taking interest. It is an obligation on you as well to forbid her from saving her money in this bank and taking interest, acting according to the saying of the Prophet : "Whoever among you sees an evil, he must change it with his hand, if he is unable to do so, then with his tongue, and if he is unable to do so, then with his heart, and this is the weakest level of faith." [Muslim]

As regards giving Zakat to your grandmother, then the majority of the scholars of the Hanafi, Hanbali and Shaafi'i schools are of the view that it is not permissible to give Zakat money to the grandmother. If she is poor, it is an obligation on her children or grandchildren to spend on her. It is not permissible for you to give up the obligation of spending on her just because you gave her Zakat, and if she is rich, then she is not among the people who are entitled for Zakat as mentioned in Fatwa 88368 and 86546.

But it is permissible for you to give the Zakat to your maternal uncle and maternal aunt it they are eligible for Zakat; this is something desirable. The Prophet said: "A donation to a poor person is a donation, and a donation to a relative is a donation in addition to keeping ties with kinship." [Ahmad, An-Nasaa'i and At-Tirmithi]

With regard to giving them Zakat without informing them that it is Zakat, then this is permissible, on the condition that your intention is Zakat and not a gift, and on the condition that they are eligible for Zakat.

Concerning the Zakat and whether it is calculated from the total amount of money including the debts, then the view we adopt in Islamweb is that there is no Zakat on debts, and debts should be deducted from the capital money whether the debt is immediate or deferred, and there is no Zakat if after deducting the debts the remainder of the money is below the Nisaab (minimum amount liable for Zakat).

Therefore, if you possess an amount of money of 700,000 Rupees and you are indebted by 500,000 Rupees, then you have to pay the Zakat on 200,000 Rupees if it is beyond the Nisaab and a complete Hijri year (lunar year) elapsed on it; otherwise you are not obliged to pay Zakat.

This means that you have to pay the Zakat after you repay your debts and whatever remains is an amount that is liable for Zakat if it reaches the Nisaab.

Finally, we remind you that the Zakat is due when a complete lunar year elapses whether that is in Ramadan or any other lunar month.    

Allaah Knows best.