Zakat Deduction from Bank Accounts in Pakistan: Nisab, CZ-50 and Your Own Calculation
What your bank takes on 1st Ramadan, how the CZ-50 declaration works, and how to work out the zakat you owe on everything else.
On the first day of Ramadan, Pakistani banks deduct zakat at 2.5% of the full balance in savings, PLS and similar deposit accounts held by Muslim Pakistani citizens, but only if the balance is at or above the nisab the government notifies that year. For Ramadan 2026 the nisab was Rs 503,529. Current accounts are not deducted.
You can stop the deduction by giving your branch a sworn CZ-50 declaration at least 30 days before the deduction date. Bank deduction covers only that one account, so your gold, cash, shares, receivables and business stock still need their own calculation.
01How compulsory zakat deduction works
Deduction at source comes from the Zakat and Ushr Ordinance, 1980. Section 3 of the Ordinance charges zakat compulsorily on assets listed in its First Schedule, and savings bank accounts are the best-known item on that list. The bank acts as a Zakat Collecting Office: it reads the balance, deducts the amount and sends it to the Central Zakat Account at the State Bank of Pakistan.
Each year the federal government, through the Ministry of Poverty Alleviation and Social Safety, issues a notification fixing the nisab for deduction. In 2026 that notification was dated 16 February. A day later the State Bank of Pakistan issued a circular telling all banks, DFIs and microfinance banks to stay closed to the public on 1st Ramadan so the deduction could be processed.
Two details surprise many account holders. First, banks apply 2.5% to the entire balance, not just the part above the nisab. Second, only the balance on the deduction day counts for savings accounts.
02Which accounts are deducted and which are not
The 2026 notification refers to “saving bank and profit and loss sharing or similar bank accounts” under Asset Code 101. Other First Schedule assets, such as fixed or term deposits, are handled on their own schedules, so ask your bank how it treats a term deposit you hold.
| Account or holder | Deducted at source? | What to know |
|---|---|---|
| Savings / PLS account, Muslim Pakistani holder | Yes | Only if the 1st Ramadan balance is at or above that year’s nisab |
| Term deposit or TDR | Usually, check | A First Schedule asset; timing depends on the bank’s product and maturity dates |
| Current account | No | Not deducted at source, but the money still counts in your own zakat |
| Foreign currency account | No | Reported as exempt from compulsory deduction; confirm with your branch |
| Non-Muslim account holder | No | Bank needs a written declaration of faith on record |
| Holder who is not a Pakistani citizen | No | Bank keeps a copy of the passport or equivalent document |
| Account with a valid CZ-50 on file | No | Declaration must reach the branch 30 days before the deduction date |
| Balance below the notified nisab | No | Nothing is deducted for that year |
Because current accounts escape deduction, some people move money there before Ramadan. That avoids the bank’s cut, but it does not change what you owe as a Muslim whose wealth crosses the nisab. The money simply moves from the bank’s calculation into yours.
03The 2026 nisab: Rs 503,529, and why it jumped
For Zakat year 1446–47 (Ramadan 2026), the notified nisab for compulsory deduction was Rs 503,529. The year before, it was Rs 179,689. The figure tracks the rupee value of 52.5 tola of silver, and silver prices rose sharply over that period, which pushed the threshold up almost threefold.
The number changes every year. The next one will be notified shortly before Ramadan 1448, expected in early February 2027, and could be higher or lower depending on silver prices at the time.
04The CZ-50 declaration: who can file and how
Rule 20 of the Zakat (Collection and Refund) Rules, 1981 allows a Muslim to claim exemption from deduction on grounds of faith and fiqh. The claim is made on the declaration form known as CZ-50. In the declaration you swear that you are a Muslim, name your fiqh, and state that under it you are not obliged to pay zakat under the Ordinance on the listed assets, which include bank accounts, securities and certain funds.
The form is historically associated with followers of Fiqh-e-Jafaria, though the declaration itself asks for your own fiqh. It is a sworn legal statement, and banks such as Allied Bank warn that a false declaration has legal consequences. If you are unsure whether your circumstances fit, speak to a scholar of your school and, where needed, a lawyer before signing.
Filing a CZ-50 does not cancel the religious duty for anyone whose fiqh requires zakat. It only stops the bank from deducting, and you then pay zakat yourself.
How to file it
- Get the format
Ask your branch for its CZ-50 format. The common version is prepared on Rs 50 stamp paper.
- Fill and swear it
Add your name, parentage, age, address and CNIC, then sign before an authorised officer such as a notary public or oath commissioner. Two witnesses sign too.
- Submit the original in time
The Rules say the declaration must be filed at least 30 days before the valuation date. Banks accept the original or a notary-attested true copy, not a plain photocopy.
- Collect your acknowledgement
State Bank circular CPD No. 3 of 2013 requires branches to stamp, date and sign a photocopy for you. Keep it; it is your proof if zakat is deducted wrongly.
- Cover every account
Each account or asset with its own number counts separately, so list them all or file one per account. A declaration stays valid while the bank holds it and the account stays open.
Pakistanis living abroad can swear the form before an authorised officer at a Pakistani embassy or consulate. For joint accounts, the exemption applies only to the declaring holder’s pre-specified share; if no share is specified, zakat is deducted from the whole balance. Most banks process the declaration at the branch. Digital-only banks set their own process, so ask early.
Not sahib-e-nisab all year? The Ordinance also lets a person who was not above nisab for the whole preceding zakat year prove this to the Local Zakat Committee of their area and get exemption or a refund. This route is separate from CZ-50 and has its own paperwork.
05Calculating your own zakat
The bank deduction is one slice of your zakat. The full obligation covers all zakatable wealth you hold on your zakat date. Work through it like a balance sheet.
- Fix your zakat date
It falls one lunar year after your wealth first reached the nisab. Many families settle on 1st Ramadan so it lines up with the bank deduction.
- List your assets at today’s value
Cash, every bank balance, gold and silver, investments, money owed to you and business stock.
- Subtract debts that are due
Bills, payables and loan instalments that are payable now or soon. Views on long-term loans differ, so ask your scholar.
- Compare the net with the nisab
Use the silver or gold nisab according to the view you follow, valued at that day’s price.
- Pay 2.5% and credit the bank’s deduction
If the bank already deducted zakat from an account counted here, subtract that amount from what you owe.
What goes on each side
- Cash and bank balances: everything, including current accounts, foreign currency accounts at the day’s exchange rate, and mobile wallets.
- Gold and silver: valued at the day’s rate for the purity you own. Whether personal-use jewellery counts depends on your school; our guide to zakat on gold in Pakistan covers tola weights, purity and jewellery in detail.
- Shares and mutual funds: shares bought to trade are commonly counted at full market value. For long-term holdings, some scholars instead count only your share of the company’s zakatable assets, such as its cash, receivables and inventory.
- Receivables: loans you have given that you expect back are generally included. Debts you doubt will ever be repaid are treated differently by different scholars, and many say zakat is paid on them once received.
- Business stock: goods held for sale, valued at their current sale value on your zakat date. Shop fittings, machinery and vehicles used in the business are not counted.
- Not counted: your home, car, furniture and household items for personal use.
06Silver or gold nisab? The scholarly views
The classical nisab is 52.5 tola (612.36 g) of silver or 7.5 tola (87.48 g) of gold. Today the gold figure is several times higher in rupees, so the choice matters for anyone whose wealth sits between the two.
Many Hanafi scholars, whose view is widely followed in Pakistan, hold that for cash and mixed wealth the silver nisab applies because it brings more people into giving and so benefits recipients. The government’s bank-deduction threshold is also based on silver. Other contemporary scholars argue that gold better reflects a meaningful level of wealth today and use the gold nisab for cash. Where someone owns only gold, the gold nisab is widely applied.
Both positions are held by respected scholars, and this article does not choose between them. Ask a scholar you trust, then apply the same method each year.
07Worked examples
All names are hypothetical. Gold at Rs 450,000 per tola and silver at Rs 9,500 per tola are assumed figures for illustration only. Check the day’s rates before you calculate.
What the bank deducted from Sana in 2026
Sana keeps a PLS savings account. On 1st Ramadan 1447 (19 February 2026) her balance was Rs 750,000. She had not filed a CZ-50.
Her brother Hamza had Rs 503,000 in the same kind of account, just Rs 529 under the nisab, so nothing was deducted from him. His zakat on that money still depends on his total wealth.
Bilal’s full zakat as a shopkeeper
Bilal runs a small hardware shop. His savings balance was below the bank’s nisab, so nothing was deducted, and he calculates everything himself on his zakat date.
Assets
Liabilities due
With silver at the assumed rate, the silver nisab is 52.5 × 9,500 = Rs 498,750, and Bilal is well above it. The gold nisab at the assumed rate is 7.5 × 450,000 = Rs 3,375,000, which his net wealth does not reach. Here the view he follows decides the outcome, so he should settle it with a scholar.
Ayesha: crediting the bank’s deduction
Ayesha uses 1st Ramadan as her zakat date. Her savings balance that morning was Rs 920,000, so the bank deducted 2.5%, which is Rs 23,000. She also owns 1.5 tola of gold, keeps Rs 40,000 in cash and owes Rs 60,000 on a bill due that month.
Most people in Pakistan treat the bank’s deduction as zakat paid. If your zakat date falls on a different day, value the account on your date and still subtract what the bank took during that zakat year.
08Bank deduction vs paying zakat yourself
| Point | Deduction at source | Self-calculated zakat |
|---|---|---|
| What it covers | One deposit account at a time | All zakatable wealth together |
| Threshold | Government nisab, Rs 503,529 in 2026 | Silver or gold nisab on your own date |
| Debts | Ignored | Debts due are subtracted |
| Base for 2.5% | Account balance on 1st Ramadan | Net wealth on your zakat date |
| Where it goes | Central Zakat Account at SBP, then the zakat system | Recipients you choose who are eligible |
| How to opt out | CZ-50 or non-Muslim / non-citizen declaration | Not applicable |
The bank ignores debts entirely, so a person with a large savings balance and an equally large loan can lose 2.5% at the bank even though their net wealth is low.
09Common mistakes
- Assuming the bank deduction is your whole zakat. It ignores gold, cash, shares and every other account.
- Paying twice on the same money. Forgetting to subtract the bank’s deduction from your own total.
- Using last year’s nisab. The government figure changed from Rs 179,689 to Rs 503,529 in a single year.
- Filing CZ-50 in February. Thirty days before 1st Ramadan means early January, and banks need processing time.
- Leaving without a stamped copy. Without it, getting a wrong deduction reversed is much harder.
Planning the rest of your finances? See the salary tax slabs for 2026-27 or estimate your take-home pay with the salary tax calculator.
10Questions people ask
Is zakat deducted from current accounts in Pakistan?
No. Compulsory deduction applies to savings, PLS and similar deposit accounts. A current account balance is still part of your own zakat calculation.
What was the zakat nisab for bank deduction in 2026?
Rs 503,529, notified on 16 February 2026 for Zakat year 1446–47. Accounts below this balance on 1st Ramadan were not deducted. A new figure is notified before each Ramadan.
Does the bank deduct 2.5% only on the amount above the nisab?
No. If the balance is at or above the nisab, 2.5% is taken on the full balance. A Rs 600,000 balance loses Rs 15,000.
When is the last date to submit CZ-50?
At least 30 days before the valuation date, which is 1st Ramadan. With Ramadan 1448 expected around 8 February 2027, aim to file by the end of December 2026.
Do I need to submit CZ-50 every year?
Generally no. The Rules say a declaration stays valid while it and the account remain with the bank. A new account needs its own declaration.
How can a non-Muslim stop zakat deduction?
Give the bank a written declaration of faith. CZ-50 is meant for Muslims claiming a fiqh-based exemption, not for non-Muslims.
Can I get a refund if zakat was deducted wrongly?
Contact your branch first with your stamped CZ-50 copy or other proof. If you were not sahib-e-nisab for the whole year, the Local Zakat Committee handles refunds.
Sources
- State Bank of Pakistan, BPRD Circular Letter No. 4 of 2026 (bank holiday on 1st Ramadan)
- SBP BPRD Circular Letter No. 3 of 2026, nisab notification of the Ministry of Poverty Alleviation and Social Safety
- SBP CPD Circular No. 3 of 2013 (acknowledging CZ-50 forms)
- The News: Govt sets zakat nisab at Rs503,529 for 2026
- Allied Bank: Zakat on bank deposits in Pakistan
- APP: Ramazan moon sighted, first fast on 19 February