Zakat Deduction From Bank Accounts in Pakistan 2026-27 — The Complete Way to Stop It
Every year in Pakistan on 1 Ramzan, the State Bank of Pakistan automatically deducts Zakat from all bank accounts holding more than the Nisab. Many people are unaware of this deduction. Some account holders can stop it through a CZ-50 declaration — see below what it is and what you must read before signing. This guide explains the whole process of zakat deduction bank Pakistan 2026-27.
1. What Is Bank Zakat Deduction?
Under Pakistan's Zakat and Ushr Ordinance 1980, every year on 1st Ramzan the State Bank of Pakistan automatically deducts 2.5% Zakat from savings accounts, term deposits and some National Savings certificates holding more than the Nisab. The amount goes to the Government's Zakat Fund and is distributed among those entitled to it.
The Nisab changes every year: the Nisab is calculated from the current market rate of silver (612.36 grams), so it can change every year — sometimes even every month. We do not give a specific rupee figure here because last year's number may be wrong this year. Confirm the current Nisab with your bank or from the official pre-Ramzan notification of the State Bank/Zakat & Ushr council. If your account holds more than that on 1 Ramzan, Zakat will be deducted.
2. Which Accounts Is Zakat Deducted From?
Zakat is not deducted from every account. These accounts are within its scope:
| Account Type | Is Zakat Deducted? |
|---|---|
| Saving Account | Yes ✓ |
| Term Deposit / Fixed Deposit | Yes ✓ |
| National Savings Certificates | Some — yes on DSC and SSC; RIC and Behbood exempt (section 6) |
| Current Account | No ✗ |
| Foreign Currency Account | No ✗ |
| Minor's Account (under 18) | No ✗ |
3. How to Stop Bank Zakat Deduction — the CZ-50 Form
CZ-50 is a sworn declaration an account holder gives their bank so that Zakat is not deducted from their account. It is a statement made before a notary, so read the whole declaration printed on the form before signing, and sign it only if it is true for you. For who may make this declaration and on what basis, see the form's own text — we did not verify the form's official text in this pass. The process:
- Get the form: ask your bank branch for the CZ-50 form or download it from the bank's website.
- Fill in the form: enter your name, CNIC and account number, and read the whole text of the declaration.
- Have it notarized: the form must be attested by an oath commissioner or notary public.
- Submit it to the bank: submit it at your bank branch before Ramzan — ideally during the month of Shaban.
- Get confirmation: always get written confirmation or a receipt from the bank that your form has been registered.
Deadline: the CZ-50 form must be submitted before 1 Ramzan. If Ramzan has begun and the form was not submitted, Zakat is deducted that year. Some banks set their cut-off date well before this — ask your bank.
4. Zakat Calculation — How Much Will Be Deducted?
If the balance on 1 Ramzan exceeds that year's notified Nisab, the 2.5% works out as follows. Which balances fall below the Nisab depends on that year's notification — so no threshold figure is given here:
| Saving Account Balance (1 Ramzan) | Zakat Rate | Zakat Amount |
|---|---|---|
| Rs. 1,50,000 | 2.5% | Rs. 3,750 |
| Rs. 5,00,000 | 2.5% | Rs. 12,500 |
| Rs. 10,00,000 | 2.5% | Rs. 25,000 |
| Rs. 50,00,000 | 2.5% | Rs. 1,25,000 |
This table applies 2.5% to the whole balance. Whether the deduction is made on the whole balance or only on the amount above the Nisab we have not confirmed from the text of the Zakat and Ushr Ordinance — check your bank's Zakat deduction certificate to verify.
5. Zakat and Income Tax — Both Together?
Yes, the bank deducts Zakat and income tax withholding separately. But the good news is that Zakat paid is deductible in your income tax return:
The Benefit of Zakat in Your Tax Return
- ✅ Under Section 60 of the Income Tax Ordinance, Zakat paid under the Zakat and Ushr Ordinance 1980 is a deductible allowance — meaning it is subtracted from your taxable income
- ✅ Enter this amount in the Zakat section of your FBR IRIS return
- ✅ It can reduce your tax liability — the Zakat is not returned; you only save tax on that amount
- ⚠️ Section 60(3): any part that cannot be used in that year — for example, if your only income is final-tax bank profit — is neither refunded nor carried forward to the next year
- ✅ Always get a Zakat deduction certificate from the bank as proof
6. Zakat on National Savings Certificates
Zakat on National Savings certificates differs by certificate. According to CDNS's own product pages (savings.gov.pk, read on 23 September 2026):
| Certificate Type | Zakat Status | Note |
|---|---|---|
| Behbood Savings Certificate | Exempt | CDNS: “exempted from Zakat collection” |
| Regular Income Certificate | Exempt | CDNS: “exempted from Zakat deduction” |
| Defence Savings Certificate | Deducted | CDNS: “deducted at source as per rules” |
| Special Savings Certificate | Deducted | CDNS: “collected at source as per rules” |
| Prize Bonds | Not confirmed | CDNS's prize bond page does not mention Zakat — we make no claim |
7. FAQ — Bank Zakat Deduction Pakistan
How much Zakat is deducted by the bank?
Every year on 1 Ramzan, 2.5% Zakat is deducted from zakatable accounts such as savings accounts and term deposits, if the balance that day exceeds that year's notified Nisab. The Nisab is based on the value of 612.36 grams of silver and is notified before Ramzan. Whether the 2.5% applies to the whole balance or only to the amount above the Nisab we have not confirmed from the Ordinance's text — check your bank's Zakat deduction certificate.
How do I stop the bank deducting Zakat?
Through the CZ-50 declaration, attested by a notary public or oath commissioner and submitted to the bank before 1 Ramzan. It is a sworn statement: read the whole declaration printed on the form before signing, and sign it only if it is true for you. For who may make this declaration, see the form's own text — we have not verified its official text. Some banks set their cut-off date well before 1 Ramzan, so ask in advance.
Do I have to submit CZ-50 every year?
Different claims circulate on this — some say once is enough, others that a new one is needed every year — and we have not settled it from any official source. Confirm with your bank, and with a new account or a new bank, always ask whether your old declaration applies there.
Is Zakat deducted from a current account?
No — a current account is outside compulsory Zakat deduction; savings accounts, PLS accounts and term deposits are within its scope, and the same rule applies to Islamic banking savings accounts. We have not verified this account-by-account list against the Ordinance's Schedule, so confirm your account's category with your bank.
What is the Nisab for 2026-27?
The Nisab is based on the market value of 612.36 grams of silver, and the government notifies its official figure every year before Ramzan. The price of silver keeps changing, so we do not publish a rupee figure — get the current figure from your bank or the official pre-Ramzan notification.
Does Zakat deducted by the bank reduce income tax?
As an allowance, yes. Under Section 60(1) of the Income Tax Ordinance, Zakat paid under the Zakat and Ushr Ordinance 1980 is a deductible allowance, meaning it is subtracted from your taxable income. The Zakat itself is not returned; you only save tax on that amount. Under Section 60(3), any part that cannot be used in that year — for example, if your only income is final-tax bank profit — is neither refunded nor carried forward to the next year. Keep the bank's Zakat deduction certificate with your return.
If Zakat has already been deducted, can I get it back?
First make a written request at your bank branch and ask whether a refund is possible in your case. We have not confirmed from the official rules in which circumstances Zakat is returned — for example, if your declaration was submitted on time and it was deducted anyway — so we give no assurance here.
How is Zakat deducted from a joint account?
We have not verified from any official source the rule on whose share, and whose declaration, stops Zakat on a joint account, so we are not publishing a general answer. If the account is joint, ask the bank which holders' declarations are needed to stop the deduction.
Is Zakat deducted from a non-Muslim's account?
No. Zakat applies only to Muslim account holders, so a non-Muslim does not need CZ-50. Just make sure your religion is recorded correctly in the bank's records when you open the account.
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