Sohail Shuja
Chief Minister (5k+ posts)
Yes Sir. Moreover,if the earnings are above nisaab, then the zakat be calculated on the earnings above the nisaab threshold, only. Rest is Zakaat free.Thanks for this great information as related to the pension funds, and it makes perfect sense. So let's assume that if someone has a pension fund portfolio of one million invested strictly in the equity markets (profit/loss basis) and let's say that the annual income received is 50k (total of dividends and capital gains, i.e. increase in shares value), then the zakat is due on 50k and not on the total value of the portfolio (1M). Is this correct understanding?
One more thing is the capital gains. The gains are not calculated unless the original amount is withdrawn. Therefore the assets are taken at their book value, not the market value.
Markets are very volatile, hence, capital gains are not subject to it, unless materialized. Calculations on asset gains can be very misleading. Also, this condition applies on shares which are taken as an investment to be traded off later. Not on investments which are only made for the sake of earning profits from dividends.
Last edited: