Zakat Procedure and Areas for Donation
Areas for Zakat Fund
Zakat Fund is utilized for the following purposes:
• Assistance to the needy, indigent and poor particularly orphans and widows, handicapped and the disabled.
• Assistance to the needy persons affected or removed homeless due to natural calamities.
Central Zakat Council (CZC) is the apex body to provide policy guidelines and general superintendence and control. It is headed by a judge from the Supreme Court of Pakistan. In each province Provincial Zakat Councils headed by Judges of High Courts have been established under which District Zakat Committees and Local Zakat Committees are functioning.
Collection of Zakat
Zakat is collected @ 2.50% by banks and other financial institutions on date of 1st Ramadan-ul-Mubarak from Saving Accounts. Currently, more than 2000 Zakat Collection Controlling Agencies (ZCCAs) including 65 Banks/Financial Institutions and Private Limited Companies are authorized to deduct Zakat and deposit the amount in the Central Zakat Account No.08 maintained with the State Bank of Pakistan.
Nisab relates the asset to liability of Zakat i.e. Silver or cash or gold, or goods for trade or any other assets liable to Zakat under Shariah, the aggregated value of which is equal to the value of 612.32 grams of silver. The value is notified by the Administrator General for each year on zakat valuation date (i.e. 1st of Ramadan-ul-Mubarak).
Assets liable to compulsory deduction of Zakat
All assets liable to Zakat are divided into two categories, especially in two schedules in the Ordinance 1980. The first schedule relates to the assets which are subject to compulsory computation of Zakat through deduction at source for credit into the Central Zakat Fund maintained with State Bank of Pakistan. All banks, post offices, saving centers, investment centers, financial institutions, insurance companies and government departments are working as Zakat Collection and Controlling agencies without arranging any extra remuneration.
The following assets are subject to compulsory deduction of Zakat:
• Saving Bank Accounts and similar accounts.
• Notice Deposit Accounts, receipts and similar accounts and receipts.
• Fixed Deposit Accounts and similar accounts and receipts.
• Saving/Deposit Certificates, accounts and receipts and Saving Certificates, accounts and receipts and similar certificates/accounts and receipts in which return is receivable and is received by the holder on maturity or encasement.
• National Investment Trust Unit.
• Investment Cooperation of Pakistan Mutual Funds Certificate.
• Govt. Securities on which the return is receivable by the head periodically.
• Securities including shares and debentures of companies.
• Life Insurance Policies
• Provident Fund
Assets not subject to compulsory deduction of Zakat
1. Gold, silver, prize bonds, animals.
3. Current accounts
4. Loan receivable etc.
The deserving recipients
The people deserving zakat are nominated by the Local Zakat Committees. The funds for zakat are allocated to Local Zakat Committees by the District Zakat Committees, which further distribute it to the deserving people through cross cheques issued by the Local Zakat Committees.