Zakat will only payable when money from the fund is paid out and received by the contributor. Zakat is an Islamic obligation on adult muslins who are capable for paying zakat. Directing the rules and guidelines on paying Zakat can be very complicated due to its rules. However, we are giving you proper guideline about Zakat on Pensions. Zakat is only payable on certain types ok pensions not on all types of pensions.
Zakat is only payable on certain types of pensions which are as follows:
Defined contribution schemes. This includes:
-
- Group Personal Pensions
- Personal Pension Plans
- AVC - Additional Voluntary Contribution
- SIPPs - Self-Invested Personal Pension
- Stakeholder Pensions
- Group Stakeholder Pensions
These are Zakat-able during employment whilst contributing.
Muslims who do not fall into Zakat on Pensions
- Defined benefit schemes. This includes final salary and CARE schemes.
- State pensions.
These are non-Zakat-able employed despite any pension deductions from the salary. Calculating real amount of zakat is not an easy task. It’s really important to check with your pension provider which category you fit into if you’re not yet aware, and then factor your pension assets into your total personal wealth and holdings so that you can make an exact valuation when calculating your Zakat. So, before giving zakat these factors should be consider.
When do I have to pay the Zakat on my pension?
People who are eligible to pay Zakat on their pension are as follows:
Some pensions are released when someone get retire from their jobs so it is not possible to pay zakat on that period. For the paying the zakat one should wait the release of zakat fund and pay their liable zakat. In other words, it is permissible to wait until you acquire your pension funds, however far in advance that may be. Simple deduct the Zakat able amount from the total. However, it is imperious that you carefully and strictly log the Zakat able amount on your pension each year that you have been eligible for so that by the time you are able to deduct, you are doing so correctly. Zakat on pension is simple in calculation.
Bottom Line:
Islam encourages Muslims to help each other because Muslims are like a family according to Holy Quran. An easy way to do so is through charitable organizations like Seedout.org. Donate Zakat to Deserving People.
Seedout.org is Pakistan first Crowdfunding platform, donate zakat online. All the records about transactions are publish on website.
Help SeedOut help Pakistan
