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

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.

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.

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.

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.

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.

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. Zakat is separate from the withholding tax on profit, covered in 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, tax on bank profit, Banking & Payments, Money.