How this works
It's 2.5% of your whole balance, not just the excess
This is the single most common point of confusion. If your balance clears the nisab, the bank deducts 2.5% of your entire balance — not 2.5% of the amount above the threshold. A balance of Rs 600,000 against a nisab of Rs 503,529 gets a deduction of Rs 15,000 (2.5% of the full 600,000), not 2.5% of the 96,471 excess.
The nisab changes every year
The nisab is pegged to the value of silver, so it moves with the market — it isn't a fixed rupee figure set once. The 2026 nisab of Rs 503,529 is roughly 180% higher than 2025's Rs 179,689, reflecting a sharp rise in silver prices. Check for a fresh notification each year before Ramadan.
How to avoid the automatic deduction
If you'd rather calculate and pay your own Zakat directly (common for those who don't want the bank's system to be their sole method), you can file a CZ-50 exemption declaration with your bank — on stamp paper, notarized, submitted at least 30 days before Ramadan. This only stops the automatic bank deduction; it doesn't remove your underlying religious obligation to pay Zakat some other way.
It's tax-deductible
Zakat compulsorily deducted by your bank is fully deductible from your taxable income under Section 25 of the Zakat and Ushr Ordinance 1980, with no upper cap — worth factoring in alongside the Take-Home Pay calculator when estimating your actual annual tax position.
Assumptions & limits
Covers bank-deducted Zakat on savings/PLS accounts only. Physical gold, gold-linked investment products, CDC investor accounts, and mutual fund holdings use separate rules and separate exemption filings — a CZ-50 with your bank doesn't cover those. Figures are for guidance only, not religious or tax advice.