Frequently Asked Questions
1)
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Do I need to pay zakat?
Zakat is a religious obligation that is compulsory for all Muslims who are free (not a slave) and possesses the required nisab (the minimum amount of wealth that one must have before zakat is payable) for one haul (one year according to the Islamic calendar or solar calendar).
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2)
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How much is the nisab amount?
The nisab is equivalent to the current market value of 85 grams of pure gold. In Malaysia, the amount may vary from state to state, and from time to time.
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3)
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What is a haul?
A haul is the completion of a period of one year either according to the Islamic calendar which is 354 days or according to the solar calendar which is 365 days. Zakat is only payable on assets that have been held for at least this period.
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4)
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What is the rate of zakat?
Zakat rate on standard wealth/assets is 2.5% if the haul is based on the Islamic calendar. However, if it is based on the solar calendar, the rate is 2.577% (365 days X 2.5% / 354 days). This is to compensate the difference between Islamic and solar calendar. Please refer to LZS website - http://www.zakatselangor.com.my/info-zakat/makluman-umum-kutipan/
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5)
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What are the assets that a Muslim is required to pay zakat on?
5.1) Gold and Silver
5.2) Cash and Liquid Investments (including shares, saving accounts, unit trusts and etc.)
5.3) Livestock
5.4) Agriculture output
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6)
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Is an individual required to pay zakat if he or she invests in unit trust funds?
Yes, zakat is payable on the unit trust funds if the investor meets the thresholds for the nisab and haul.
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Scenario 1
Haji Shaharudin invested into unit trust funds with Public Mutual Berhad. He is a passive investor and holds the unit trust for more than a haul. Below are the details of his unit trust investments:
Funds invested
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Initial Investment
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NAV per unit @ 1st Jan 2016
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No. of units
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NAV per unit @ 31st Dec 2016
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Closing Value
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Fund A
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RM10,000.00
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RM0.8551
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11,694.54
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RM0.9662
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RM11,299.26
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Fund B
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RM8,000.00
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RM0.3616
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22,123.89
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RM0.4727
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RM10,457.96
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Fund C
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RM4,000.00
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RM1.1559
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3,460.51
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RM1.2670
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RM4,384.47
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Total
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RM22,000.00
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37,278.94
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RM26,141.69
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Nisab for December 2016 is RM15,420.00
The year-end value of the unit trust investment is RM26,141.69, which is greater than the nisab value. Therefore, the investor needs to pay the zakat. The zakat amount payable is RM26,141.69 X 2.5% = RM653.54
Scenario 2
Fatimah, an experienced investor has made many unit trust investments with Public Mutual Berhad over a period of 1 year. The following are the transaction records.
Date
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Fund invested
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Investment Value
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+/-
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NAV
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No. of units
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01.01.2016
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Fund XYZ
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RM15,000.00
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RM0.3347
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44,816.25
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02.02.2016
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Fund XYZ
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RM7,500.00
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RM0.2431
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30,851.50
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03.03.2016
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Fund XYZ
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(RM3,750.00)
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RM0.2565
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(14,619.88)
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05.05.2016
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Fund XYZ
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RM20,000.00
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RM0.2708
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73,855.24
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31.12.2016
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Fund XYZ
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RM50,197.45
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RM0.3721
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134,903.11
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Nisab for December 2016 is RM15,420.00
As at 31st December 2016, the investment value is RM50,197.45, which is greater than the nisab value. Thus, this investment is subject to zakat. The zakat amount payable is RM50,197.45 X 2.5% = RM1,254.94
7)
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Do I need to pay zakat even though my investment suffers a loss?
Yes, you are required to pay zakat even if your investment suffers a loss. This is because zakat is payable on the person’s total wealth at the end of one haul period and which has exceeded the nisab value.
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Scenario 3
Shafarin is a Mutual Gold investor who has invested RM150,000.00 in a Shariah series fund. The NAV during the initial investment was RM0.2835 per unit. As at December 2016, the NAV has dropped to RM0.25 per unit. Even though the investment suffers a loss, the unit trust NAV is RM132,275.13 which is greater than the nisab value. Shafarin should pay zakat although his investment has recorded a loss.
(Note: If the investment value is below the nisab value, no zakat is payable)
8)
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What are the types of zakat that are entitled for a tax rebate?
All types of zakat payable on properties and zakat fitrah are eligible for a tax rebate. Section 6A (3) of the Income Tax Act, 1967 provides that all zakat or other Islamic religious obligatory fees payment are eligible for tax rebate. However, the rebate will only be granted to individual taxpayers and not corporations.
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9)
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Do I need to pay zakat for my conventional unit trust funds?
Zakat is applicable only on the value of the original investment in and income from Shariah compliant funds. However, income derived from non-Shariah compliant activities is to be purified by channeling it to charitable bodies as soon as possible.
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Note: This FAQs has been vetted and endorsed by Lembaga Zakat Selangor and ZICO Shariah Advisory Services Sdn Bhd