Zakat On Pre-tax IRA Account
Pension is subjected to 10% production zakat , however, it only becomes due when you receive the pension. The principle is that for zakat to be due on an asset/earning, it has to be at one’s disposal ( tasarruf ). If the funds so invested are at your disposal then Zakat will be levied on that amount, initially 10% production zakat on gross amount and if it stays with you till year end and becomes a part of your wealth, then 2.5% Zakat will also be levied being Zakat on Assets/Wealth at year-end. It must be noted that taxes paid to the state in any form are eligible for deduction from Zakat obligation . But i f one is still not in a position to Pay Zakat obligation because of a genuine net loss, then Zakat obligation would be considered waived and one should do Charity to the best of their ability. Please also see for Pension : Discussion 81197 Complete Law of Zakat in summarized form : Discussion 58129 • Reply 58137
You may enter appropriate numbers in our Zakat Calculator after reading the description for each box. When you reach the end, it will generate a statement showing you exactly what you owe after any applicable deductions, and what percentage was applied to each category. It’s also a great way to learn the sharia of zakat. View Zakat Calculator