Deduction of Zakat on GP Fund DT 21.12.2005
OFFICE MEMORANDUM
Subject: Deduction of Zakat on GP Fund
I am directed to refer M.A.G. U.O. No. A/O 25-Appex/P.257 dated 08.11.2005 and letter No.393 No.A/025-Appx/P.319 dated 12.12.2005 on the above subject and to state that the matter has been examined. It is held that there is no ambiguity in the law, & rules with regard to period of filing a declaration (CZ-50) which shall be filed 30 days preceding the Valuation Date as provided in clause 3 (a) of Section 1 of Zakat & Ushr Ordinance, 1980 read” with rule 20 of Zakat Collection & Refund Rules, 1981 in both cases either it is a final payment of Provident Fund or nonrefundable advance. As regard claim of refund of Malik Liaqat Ali declaration filed 14.01.2005 was not valid for preceding Valuation Date i.e. 16.10.2004 hence, Zakat as deducted by MAG while payment of non-refundable advance to the said individual, is correct and does not liable for any refund.
This letter is about a case concerning the filing of a Zakat declaration (form CZ-50) and a refund request by a person named Malik Liaqat Ali. Let me break it down in the simplest way:
Introduction
The letter starts by referring to two previous official communications sent in November and December of 2005. These letters were about the same issue – Zakat deduction and the rules around filing a declaration form (CZ-50). Zakat is an Islamic form of charity, where a percentage of wealth is given to those in need. The government has specific rules about when and how this Zakat should be collected, especially when it involves money like Provident Fund payments.
Filing a Zakat Declaration
The letter explains that there is no confusion about the law or the rules for filing the Zakat declaration (CZ-50). According to the Zakat and Ushr Ordinance of 1980, and the Zakat Collection and Refund Rules of 1981, the form must be filed 30 days before the Valuation Date.
What is a Valuation Date?
The Valuation Date is a specific day when the government checks how much Zakat should be deducted from people’s assets (like savings or funds). To avoid Zakat being deducted from your money, you must submit the CZ-50 form 30 days before this date. This form basically states that Zakat should not be deducted from your funds for religious or other reasons.
The Issue with Malik Liaqat Ali
In this case, Malik Liaqat Ali wanted to stop Zakat from being deducted from his non-refundable advance (a type of financial payment). He submitted his CZ-50 declaration form on 14th January 2005, but there was a problem: the Valuation Date had already passed. The Valuation Date for his payment was 16th October 2004.
Since the law requires the form to be submitted 30 days before the Valuation Date, his form was filed too late to be valid for that period.
Zakat Deduction and Refund Request
Because Malik Liaqat Ali missed the deadline, the Zakat deduction on his payment was correct under the rules. Zakat was properly deducted from his non-refundable advance payment, so he is not entitled to any refund. The officials reviewed his case and confirmed that the Zakat deduction was in line with the law.
Summary of the Ruling
The letter clearly states:
- The rules about filing the CZ-50 form are straightforward: it has to be submitted 30 days before the Valuation Date.
- Malik Liaqat Ali filed his form late, so it was not valid for the 16th October 2004 Valuation Date.
- As a result, the Zakat deduction made by the Military Accounts General (MAG) was correct.
- Malik Liaqat Ali cannot get a refund because his Zakat declaration was filed after the deadline.
Conclusion
In simple terms, Malik Liaqat Ali tried to file a form to stop Zakat from being deducted, but he did it too late. Since he missed the required deadline, the authorities deducted Zakat from his payment correctly, and he isn’t entitled to get that money back. The letter explains that the rules are clear and have been followed properly in this case.
