Zakaat on retirement pension
Question
If a pension is released to an employee at the time of retirement and according to statutory law you can only cash in 1/3 of it, while the remaining 2/3 has to be re-invested in a similar fund (money never coming into your hands of the retiree) directly being re-invested on behalf of the retiree to receive a monthly pension from the investment. What are the zakaat implications on the following:
1. Is zakaat payable on the 1/3, if the retiree opt to take the 1/3?
2. Is zakaat payable on the 1/3 if the retiree opt NOT to take the 1/3?
3. Is zakaat payable on the remaining portion of the reinvested amount?
4. Is zakaat payable on the monthly income derived from the re-invested amount?
Answer
1. Yes.
2. Yes.
3. No.
4. Yes.
And Allah Ta'ala (الله تعالى) knows best.
- Answered by
- Mufti Ebrahim Salejee (Isipingo Beach)
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