# Zakat deduction from bank accounts: when it applies and how to stop it

URL: https://which.pk/money/guides/zakat-deduction-bank/
Author: Ahtisham Imtiaz
Updated: 15 Oct 2026

## Summary

Pakistani banks deduct zakat at source on the first day of Ramazan from savings, profit-and-loss sharing and similar accounts holding at least the nisab, set at Rs 503,529 for the 2026 deduction on 19 February. The rate is 2.5%, which Allied Bank says applies to the whole balance, not only the part above the nisab. Current accounts are not hit. To stop it, file a CZ-50 declaration with your bank before its cut-off. Zakat paid is a deductible allowance for income tax.

## Key facts

- Nisab 2026 (1447 AH): Rs 503,529 (2025: Rs 179,689)
- Deduction date: 1 Ramazan (19 Feb 2026)
- Rate: 2.5%
- Accounts hit: Savings, PLS and similar; not current

Zakat deduction by a bank in Pakistan happens once a year, on **1 Ramazan**, and only from savings, profit-and-loss sharing (PLS) and similar accounts holding at least the nisab. For the 2026 deduction on **19 February**, the government set the nisab at **Rs 503,529**. The rate is **2.5%**. Current accounts are not touched. To stop the deduction, you file a **CZ-50** declaration with your bank before its cut-off.

**Nisab for the 2026 deduction (1447 AH):** Rs 503,529 (Notified on 16 February 2026, up from Rs 179,689 in 2025. Based on silver at Rs 9,591 per tola, against Rs 3,350 a year earlier.)

## When is zakat deducted from bank accounts in 2026?

The deduction date is the first day of Ramazan. For 1447 AH, the Ministry of Poverty Alleviation and Social Safety notified 1 Ramazan as the "Deduction Date", subject to moon sighting. On 18 February 2026, the Central Ruet-e-Hilal Committee chairman announced that **19 February 2026** would be 1 Ramazan, so that was the deduction date.

The balance that counts is the one in your account on that day. Banks must deposit what they deduct straight away into the Central Zakat Account No. CZ-08 at the State Bank of Pakistan (SBP) and report it to the Ministry.

The Ministry issues a new nisab notification each year and SBP sends it to all banks, DFIs and microfinance banks. The next figure will only be known when that notification comes out; the 2026 one was dated 16 February, three days before Ramazan began.

## How much zakat is deducted from a bank account?

The rate is **2.5%**. If your balance on 1 Ramazan is below Rs 503,529, nothing is deducted. If it is at or above that, Allied Bank (2026) says the 2.5% is applied to the **full eligible balance** on the first day of Ramazan, not only the part above the nisab. The nisab is a threshold, not an allowance.

| Balance on 1 Ramazan 2026 | Zakat deducted (2.5% of full balance) |
|---|---|
| Rs 500,000 | Nothing (below nisab) |
| Rs 600,000 | Rs 15,000 |
| Rs 1,000,000 | Rs 25,000 |

These are our calculations from Allied Bank's description. An older Zameen.com guide (2022) says the 2.5% applies only to the amount above the nisab, which would give much smaller figures; we follow Allied Bank, a deducting bank writing in 2026, but ask your own bank if the amount matters to you.

## Is zakat deducted from a current account?

No. The 2026 notification covers savings bank accounts, PLS accounts and other similar accounts with a credit balance of Rs 503,529 or more (asset code 101). Zameen.com's guide adds that current accounts and foreign currency accounts are not subject to the automatic deduction.

## How do I stop zakat deduction from my bank account?

You submit a **Zakat Declaration Form CZ-50** to your bank. Account holders who have filed this declaration are not subject to the automatic deduction. Whether to file it is your own decision; this page only covers the process.

1. **Ask your bank for its CZ-50 requirements**, including the attestation it accepts and its cut-off date.
2. **Have the form attested.** Allied Bank, for example, accepts only the original or a true copy attested by a notary public, not a photocopy.
3. **Submit it at the branch** before your bank's cut-off. Allied Bank's page directs customers to a branch and doesn't mention online submission.
4. **Keep a copy** of what you handed in.

**The deadline differs by source:** Allied Bank requires the CZ-50 at least **30 days before** the expected deduction date. Zameen.com's 2022 guide says it must be filed by **15 Shaban**. We couldn't check the exact wording of the Zakat and Ushr Ordinance, 1980, so confirm your own bank's cut-off well before Ramazan.

## Can I submit the CZ-50 form online?

We couldn't confirm a fully online CZ-50 for an existing account at any bank. Allied Bank's page only describes branch submission. Meezan Bank's site blocked our check, so ask your own bank whether it takes the form in its app.

## Who is exempt from zakat deduction?

Sources list these groups:

- **Anyone whose balance is below the nisab** on 1 Ramazan.
- **Non-Muslims**, who give the bank a written affirmation, according to Zameen.com.
- **Non-Pakistani citizens**, who give a passport copy, according to Zameen.com.
- **People who claim exemption on grounds of their faith or fiqh** (school of Islamic law) by filing a declaration before the valuation date.

The Ministry's CZ-08 return forms ask banks to report exemptions granted to non-Muslims, non-Pakistanis and on grounds of fiqh, and refunds to non-Muslims and those exempt due to fiqh.

**Pakistanis living abroad:** We found no source that treats Pakistani citizens living abroad as a separate exempt group. The sources only exempt non-Pakistani citizens, so check with your bank whether you need to file a CZ-50.

## What if zakat was deducted by mistake?

If you are a non-Muslim and zakat was deducted from your account, Allied Bank tells customers to contact their branch for a refund. The Ministry's return forms include refunds to non-Muslims and to those exempt due to fiqh, so banks have a reporting line for them.

## What about Meezan Bank and other banks?

The nisab, date and account types above come from the government notification, so they apply to every bank, including Meezan Bank. The CZ-50 paperwork and cut-off are set out by your bank, so check them directly. We could read Allied Bank's page; Meezan Bank's site blocked our check, so we couldn't confirm its process. For how Islamic and conventional banks compare more broadly, see [Meezan Bank vs other banks](/money/guides/meezan-bank-vs-other-banks/).

## Is zakat tax deductible in Pakistan?

Yes. Under **section 60** of the Income Tax Ordinance, 2001, zakat paid in a tax year under the Zakat and Ushr Ordinance, 1980 is a **deductible allowance** against your income. It doesn't apply to zakat already taken into account under section 40(2). Any part you can't deduct in that year is not refunded and can't be carried forward or back.

To claim it, include it when you [file your income tax return](/business/guides/how-to-file-income-tax-return/). Zakat is separate from the withholding tax on profit, covered in [tax on bank profit](/money/guides/tax-on-bank-profit/).

## Who issues the zakat notification?

The Ministry of Poverty Alleviation and Social Safety, with the approval of the Administrator General Zakat. The Zakat and Ushr (Amendment) Act, 2023 replaced the Ordinance's references to the Religious Affairs division with "the Division concerned", which is why the notices now come from this ministry.

More guides: [savings account profit rates](/money/guides/savings-account-profit-rates/), [tax on bank profit](/money/guides/tax-on-bank-profit/), [Banking & Payments](/money/banking/), [Money](/money/).

## Questions people ask

### How much zakat is deducted from a bank account?

The rate is 2.5%, taken on the first day of Ramazan if your balance is at or above the nisab (Rs 503,529 for 2026). Allied Bank says the 2.5% applies to the whole balance, not only the amount above the nisab: the nisab is a threshold, not an allowance.

### Is zakat deducted from a current account?

No. The government's 2026 notification covers savings, profit-and-loss sharing and similar accounts (asset code 101). Current accounts and foreign currency accounts are not subject to the automatic deduction.

### How do I stop zakat deduction from my bank account?

Submit a Zakat Declaration Form CZ-50, attested the way your bank requires, before its cut-off. Allied Bank, for example, wants the original or a notarised true copy at the branch at least 30 days before the expected deduction date.

### Who is exempt from zakat deduction in Pakistani banks?

Non-Muslims, non-Pakistani citizens, people who claim exemption on grounds of their fiqh by filing a declaration, and anyone whose balance is below the nisab on 1 Ramazan. The Ministry's CZ-08 return forms record exemptions in these categories.

### Is zakat deducted by the bank tax deductible?

Yes. Section 60 of the Income Tax Ordinance 2001 allows zakat paid under the Zakat and Ushr Ordinance 1980 as a deductible allowance. Any part you can't use in that tax year is not refunded and can't be carried forward or back.

## Sources

- [Deduction of Zakat at source in respect of saving bank, PLS and similar accounts (Asset Code No. 101), with SBP BPRD Circular Letter No. 03 of 2026](https://www.sbp.org.pk/bprd/2026/CL3-Notification.pdf), Ministry of Poverty Alleviation and Social Safety / State Bank of Pakistan (accessed 15 Oct 2026)
- [BPRD Circular Letter No. 04 of 2025: Deduction of Zakat at source (Asset Code No. 101)](https://www.sbp.org.pk/bprd/2025/CL4.htm), State Bank of Pakistan (accessed 15 Oct 2026)
- [CZ Forms (CZ-08-A and CZ-08-B, instructions and specimens)](https://www.pass.gov.pk/Detail/YTY4OWIxMDItNGE4My00NWIzLWI5NmEtNWZkZjQwNGY3Nzkw), Ministry of Poverty Alleviation and Social Safety (accessed 15 Oct 2026)
- [Zakat and Ushr (Amendment) Act, 2023 (Act No. LV of 2023)](https://www.na.gov.pk/uploads/documents/659e5249eed79_705.pdf), National Assembly of Pakistan (accessed 15 Oct 2026)
- [Income Tax Ordinance, 2001 (amended up to 30 June 2026)](https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf), FBR (accessed 15 Oct 2026)
- [Ramazan moon sighted, Ist fast on Feb 19: Maulana Azad](https://www.app.com.pk/?p=1164821), Associated Press of Pakistan (accessed 15 Oct 2026)
- [Zakat on bank deposits in Pakistan](https://www.abl.com/zakat-on-bank-deposits-pakistan/), Allied Bank Limited (accessed 15 Oct 2026)
- [Pakistan fixes zakat nisab at Rs503,529 for Ramadan 2026](https://profit.pakistantoday.com.pk/2026/02/17/pakistan-fixes-zakat-nisab-at-rs503529-for-ramadan-2026/), Profit (Pakistan Today) (accessed 15 Oct 2026)
- [Pakistan notifies nisab for 2026 zakat deduction](https://nukta.com/pakistan-notifies-nisab-for-2026-zakat-deduction), Nukta (accessed 15 Oct 2026)
- [Zakat deductions in banks](https://www.zameen.com/blog/zakat-deductions-banks.html), Zameen.com (accessed 15 Oct 2026)