Mansoor Danish – Is Zakah (Zakat) Payable on Provident fund_

Mansoor Danish
AI: Summary © The speaker explains that the ZFinancial is based on the amount of the provident fund, not the amount of the funds themselves. The amount of the provident fund is dependent on the amount of the funds and is not commenced until a certain amount of the funds reach the company's hands. voluntary provident funds are impermissible and cannot be utilized until a certain amount of the funds reach the company's hands.
AI: Transcript ©
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salaam aleikum wa rahmatullah wa barakato. This is a question which has been asked which says how should we calculate Zakat on provident fund. So, the calculation here is extremely simple, we firstly break down the provident fund into two types. One is a provident fund which is forced upon you by your employer and this is as per the laws of the nation, where a company has to compulsorily take out a portion of the salary of the staff as provident fund. So, it is basically something which is forced upon you and then there is a sacar there is a Provident Fund, which is taken up voluntarily by the concerned individual. So, the treatment of both will be separate, if it is a

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Provident Fund, which has been taken out voluntarily. Firstly, this is not permissible, because in an Indian context, we need to understand that most of the provident fund money are going into those sectors, which are considered impermissible for investments, they trying to generate you fixed returns which are akin to rubber, and hence, it is not permissible in the first place to invest in them. And therefore, my advice to people is to come out of those investments if they have taken it up out of ignorance. Secondly, you will have to pay the Zakat on the capital amount accumulated every year on your provident fund account, not on the interest amount because the interest amount is

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not permissible anyways, so, you don't have to pay any support on that. But as far as the capital amount is concerned, every year whatever contribution you have made to that provident fund, voluntarily, you will have to make the cut on the total amount. Whatever the amount is, if it meets reaches your nisab, the minimum threshold, then the card becomes obligatory. The second scenario is where it was forced upon you compulsorily. In such a case you don't have to base account on it every year. You pay the Zakat once you reach or receive the fund at the end. Once you have the fund at the end of at the end, you possess the money in your hand and one year has passed on that money, then

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you need to pay zakat on them and the Zakat amount will be the same two and a half percent in both the cases. So in short, there are two categories voluntary provident fund, compulsory provident fund and voluntary provident fund every year on the capital amount that you've paid. You need to pay zakat on that as far as the interest amount is concerned, it is impermissible for you to take any benefit of that interest amount. In case of compulsory provident fund. You have no control over here it is the laws which require you to keep your some portion of your money over there. As such, when you receive the money at the end of your working life with the company whenever the possession of

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the money comes in your hand and a year passes on it, you need to pay the car at two and a half percent and Allah knows best

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