What Is Zakat on Bank Deposits?
Zakat is one of the five pillars of Islam. It requires Muslims to give a fixed share of their wealth to those in need, once a full lunar year (hawl) has passed on savings that meet or exceed the nisab.
In Pakistan, the government enforces this through the Zakat and Ushr Ordinance 1980. Under this law, banks must deduct zakat automatically from eligible deposits on a notified date. This is called deduction at source.
You don’t calculate or transfer it yourself — your bank does it on the government’s behalf.
When Does Allied Bank Deduct Zakat?
Allied Bank deducts zakat on the first day of Ramadan, as officially notified by the Government of Pakistan each year.
Your balance is assessed as it stands on that single day. A balance that was high last week but low on the deduction date will not trigger a deduction and vice versa.
Allied Bank transfers the deducted amount directly to the Central Zakat Account held at SBP.
Note: The exact deduction date is subject to the official announcement by the Ministry of Poverty Alleviation & Social Safety. Verify the confirmed date through Allied Bank’s branch or official communications closer to Ramadan.
How Much Zakat Is Deducted?
The Nisab Threshold
Zakat is only deducted if your eligible balance on the deduction date equals or exceeds the nisab the minimum wealth threshold. The nisab is based on the value of 52.5 tolas of silver or 75.5 tolas of gold and changes each year with silver/gold prices.
| Year | Nisab (Approximate) |
|---|---|
| 1446 A.H. (2025) | PKR 179,689 |
| 1447 A.H. (2026) | PKR 503,529* |
*Subject to official government confirmation.
If your balance falls below the nisab on the deduction date, no zakat is deducted that year.
The Deduction Rate
The rate is fixed at 2.5% of your total eligible balance not just the amount above the nisab. This is the statutory rate under the Zakat & Ushr Ordinance 1980.
Important: The full balance is used to calculate the deduction, not just the excess above the nisab.
What Does Allied Bank Do With Deducted Zakat?
This is a statutory function — not a bank policy choice. Every scheduled bank in Pakistan follows the same process under the Zakat & Ushr Ordinance 1980.
Zakat on Your Other Assets
Zakat deducted by Allied Bank covers only your bank deposit balance on the deduction date. It does not cover your other zakatable assets.
- Gold and silver held physically
- Business inventory and trade goods
- Receivables and cash held outside a bank
- Certain investment holdings
Each of these categories requires a full lunar year (hawl) to have passed on wealth meeting the nisab.
How to Claim a Zakat Exemption at Allied Bank
Some account holders are not required to pay zakat through the bank deduction mechanism. This applies to those whose fiqh (school of Islamic jurisprudence) does not recognise compulsory deduction at source as fulfilling the obligation — or who choose to calculate and pay zakat independently.
To avoid automatic deduction, you must submit a Zakat Declaration Form CZ-50.
Only the original or true copy of the Zakat Declaration Form (CZ-50), duly attested by a notary public, will be accepted from customers. Submission must reach the branch at least 30 days before the expected deduction date.
The form is a legal declaration. It must be submitted in original photocopies are not accepted. Contact your nearest Allied Bank branch well before Ramadan to confirm the exact submission deadline for the current year.
Important: The CZ-50 declaration is a legal document submitted under the Zakat & Ushr Ordinance 1980. Submitting a false declaration carries legal consequences. Consult a religious scholar or legal adviser if you are uncertain whether an exemption applies to your situation.
Frequently Asked Questions
Q. What Is the Zakat Nisab for Bank Accounts in Pakistan in 2026?
The nisab for 1447 A.H. (2026) is approximately PKR 503,529, based on the value of 52.5 tolas of silver. This figure is subject to the official announcement by the Government of Pakistan. The nisab changes every year based on silver prices it was around PKR 179,689 in 2025.
Q. Can I Get Zakat Refunded if It Was Deducted by Mistake?
If zakat was deducted in error for example, from an exempt account type or after a valid CZ-50 was already on file, or the account holder is non-muslim contact your Allied Bank branch immediately. ABL's customer service team can review the case and initiate a correction if applicable. Reach out through the Help and Support page or visit your branch directly.
Q. What Happens if My Balance Drops Below Nisab Before Ramadan?
Only the balance on the first of Ramadan matters. If your balance is below the nisab on that date, no zakat is deducted regardless of what the balance was before or after.
Q. Is the Zakat Deducted by Allied Bank Sufficient for My Full Zakat Obligation?
No. The bank deduction covers only your deposit balance. You are still responsible for calculating and paying zakat on other zakatable assets gold, silver, business inventory, receivables and other qualifying wealth — independently. The deduction happens once a year, on a single day. Knowing your balance, understanding the nisab and submitting your CZ-50 on time are the three things that determine the outcome. If you're unsure about your account status or the current nisab, speak to your Allied Bank branch or call the 24/7 helpline before Ramadan begins.