Zakat on Savings Certificates: NSC, DSC, Behbood, Sukuk and Prize Bonds

Millions of Pakistani families keep their savings in National Savings schemes: a retired father in Regular Income Certificates, a widowed mother in Behbood, a lump sum parked in Defence Savings Certificates for a daughter’s wedding. Every Ramadan the same questions come up. Did National Savings already cut my zakat? Is the profit mine to count? Why was nothing deducted from my Behbood? This guide answers those questions and shows how to enter everything in the Pakistan zakat calculator so you pay the right amount, once.

The basic rule: zakat is due on what you invested

A savings certificate is not a purchase of something that gets used up. It is your money held by the government, which you can encash, usually with a small service charge or reduced profit if you break it early. Because it is owned by you and redeemable, scholars of all four Sunni schools treat the principal like cash in hand or a bank deposit.

• Hanafi (Deobandi and Barelvi in Pakistan): the principal is counted with your cash, gold, silver and trade goods, and the total is compared with the silver nisab, about Rs 2,96,672 today. This is the position in standard Hanafi texts such as al-Hidayah and in the fatwas of the major Pakistani darul-iftas.
• Shafi’i and Hanbali: the same principle applies. Money you own outright and can get back is zakatable, and a debt owed to you by a solvent, willing debtor (which the state, paying on request, clearly is) is counted every year. Imam an-Nawawi discusses this in al-Majmu’, and Ibn Qudamah in al-Mughni.
• Maliki: the principal is zakatable too, but Maliki scholars treat money lent out (rather than traded) differently: its zakat is paid once, for one year, when it comes back to you (al-Mudawwanah; Khalil’s Mukhtasar). Read that way, you pay on a certificate’s principal when you encash it. Many Maliki readers simply count it every year with their cash, which is never less. See the Maliki calculator.
• Ahl-e-Hadith: savings certificates are money, so they count as cash here too (our reading; we have not found a Pakistani Ahl-e-Hadith fatwa on them), and our Ahl-e-Hadith calculator applies the lower of the gold and silver nisab to money, following the Permanent Committee (al-Lajnah ad-Daimah).
• Shia Ja’fari (Ayatollah Sistani): zakat on money applies only to gold and silver coins in circulation, so paper money and certificates carry no zakat. Khums applies to savings instead. See the khums calculator.

So the question is never “is my DSC zakatable?” but “how much of it is mine, and has any zakat on it already been paid?”

Which National Savings schemes have zakat deducted?

Under the Zakat and Ushr Ordinance 1980, some National Savings schemes are listed for compulsory collection of zakat at source, and others are expressly exempt from that collection. The table below is based on what the Central Directorate of National Savings (CDNS) states on its scheme pages and FAQs. Rules change, so treat it as a guide and confirm with your National Savings Centre or bank branch.

Scheme	Compulsory zakat deduction?	Do you still owe zakat on it?
Defence Savings Certificates (DSC)	Yes, collected at source “as per rules”	Yes. Subtract what was deducted.
Special Savings Certificates (SSC)	Yes, collected at source	Yes. Subtract what was deducted.
Special Savings Account (SSA)	Yes; CDNS says it is collected when the principal is withdrawn	Yes. Track deductions carefully (see below).
Savings Account (National Savings)	Yes, CDNS says zakat applies	Yes. Subtract what was deducted.
Sarwa Islamic Savings Account / Term Account	Per the Sarwa rules, deducted under the Zakat and Ushr Ordinance; ask your branch how it applies to your account	Yes. Subtract anything deducted.
Regular Income Certificates (RIC)	No, exempt from compulsory deduction	Yes, pay it yourself.
Behbood Savings Certificates (BSC)	No, exempt	Yes, if the holder is above the nisab.
Pensioners’ Benefit Account (PBA)	No, exempt	Yes, if the holder is above the nisab.
Shuhada Family Welfare Account	No, exempt (same rule as Behbood)	Yes, if the holder is above the nisab.
Short Term Savings Certificates	No, exempt	Yes, pay it yourself.
Premium Prize Bonds and ordinary prize bonds	CDNS says premium bonds are exempt; ordinary bonds are bearer instruments with nobody to deduct from	Yes, on face value.

The most important column is the last one. “Exempt from zakat” on a government brochure means exempt from compulsory deduction by the state. It does not mean that Islamic law has excused you. A widow with Rs 20 lakh in Behbood certificates still owes zakat on it if she is above the nisab; the government has simply left it to her to pay it herself.

When is the deduction made?

For bank savings accounts, the valuation date is 1 Ramadan: the balance on that day is checked against the government’s deduction nisab, and 2.5% is cut. For National Savings certificates, CDNS only says zakat is collected “at source as per rules”, and for the Special Savings Account it says the collection happens when the principal is withdrawn. In practice, certificate holders report deductions shown on profit payments or at encashment, sometimes covering more than one Ramadan at once. Because the exact mechanics differ by scheme and have changed over the years, ask National Savings or your bank to show you what was deducted, on which date and for which year. The bank zakat deduction guide explains the 1 Ramadan rule for ordinary accounts.

The CZ-50 declaration

A Muslim who is exempt from compulsory zakat on grounds of their fiqh, most commonly followers of Fiqh-e-Jafaria, can file a CZ-50 declaration with the deducting agency. For certificates, that means the National Savings Centre or bank where you hold them. It is a sworn declaration, normally on stamp paper, and it has to reach them before the deduction date. Ask the centre for its current format and deadline. Filing CZ-50 to avoid the deduction when you do not genuinely hold that belief is not a way to save money: you would still owe the zakat yourself.

The profit question: is the interest part of your wealth?

This is where Pakistani scholars genuinely differ, and it is worth understanding both views before you decide.

View 1: profit on conventional schemes is riba and is not counted

DSC, SSC, RIC, Behbood and the ordinary savings account pay a fixed, pre-agreed return on a loan to the government. Many Pakistani scholars, including the Deobandi darul-iftas and a large number of Barelvi and Ahl-e-Hadith muftis, consider this return to be riba, which the Quran prohibits (al-Baqarah 2:275-279). On this view the profit was never rightfully yours. You should give it away to the poor without the intention of earning reward, and you should not count it as your zakatable wealth or pay it out as your zakat. Your zakat is calculated on the principal only.

View 2: accrued profit is counted with your wealth

Other scholars, and many people who hold that these returns are permissible, count profit that has accrued and is payable to you as part of your wealth on your zakat date, just like a bank balance. Profit you have already received and spent is gone; profit that is sitting in your account or built into a DSC’s encashment value is counted.

What we suggest

Follow the scholar you normally follow for halal and haram questions. If you hold View 1, enter only the principal in the calculator and give away the interest separately. If you hold View 2, enter the encashment value (principal plus accrued profit). If you are unsure, ask your scholar; the difference on large holdings can be significant, and the question of what to do with past interest matters more than the zakat figure.

Sarwa Islamic schemes

CDNS presents its Sarwa Islamic Savings and Term Accounts as shariah-compliant, invested in government projects under the supervision of a Sharia board. If you accept that structure, the profit is halal income, so it is simply your wealth: count the principal and any accrued, payable profit on your zakat date.

Sukuk: government Ijara Sukuk, Energy Sukuk and sukuk funds

A sukuk is not a loan certificate. It is a share in assets (for government Ijara Sukuk, assets the state has leased back, such as a motorway section or an airport), and the “profit” is your share of the rent. That is why sukuk are bought by people who avoid DSC and Behbood. For zakat, scholars treat them by what you hold them for:

• Held to sell (trading sukuk on PSX or through your bank before maturity): count the market value on your zakat date, like trade goods.
• Held to maturity for the rental income: the simple and safe way, used by most people and our calculator, is to count the face value (or the current market value, if lower) with your cash. The AAOIFI Shari’ah standard on zakat (No. 35) and some scholars allow counting only the zakatable part of the underlying assets, since leased buildings and roads are not zakatable themselves, plus the rent you hold; ask your scholar before using that lower figure.
• Sukuk and Islamic income funds (mutual funds): count the redemption value of your units on your zakat date. Many Pakistani funds say in their offering documents that zakat is deducted from Muslim unit holders under the Zakat and Ushr Ordinance unless a CZ-50 is filed; check your fund statement and enter any deduction under Already paid.

Instrument	Zakat deducted at source?	What to count
Government of Pakistan Ijara Sukuk (bank or IPS account, PSX)	Check your bank or broker statement	Face value, or market value if you trade them
Pakistan Energy Sukuk	Check your statement	Face value, or market value if you trade them
Sukuk and Islamic income funds	Often, under the Ordinance (see the fund’s documents)	Redemption value of your units
Corporate sukuk	Check your statement	Market value

The madhab differences are the same as for certificates above: the Hanafi silver nisab for most Pakistanis, the Maliki rule for money that comes back to you, and no zakat on paper money in the Ja’fari view (khums applies instead). In our calculator, enter sukuk in the Savings certificates field and sukuk fund units under Shares; see zakat on shares and mutual funds.

Prize bonds

A prize bond is a receipt for money lent to the government, refundable at face value at any National Savings Centre or bank. Count the face value of every bond you hold, whether ordinary or Premium, at your zakat date. A Rs 40,000 Premium bond is Rs 40,000 of wealth. National Savings does not deduct zakat on prize bonds, so the whole amount is for you to pay.

Scholars who regard prize bond winnings as gambling or riba advise giving them away without the intention of reward, as with interest. That affects what you do with a prize, not the zakat on the bond’s face value.

How to enter certificates in our calculator

1. Open the Pakistan zakat calculator (or the general calculator on the home page) and choose your madhab.
2. In the cash tile, find Savings certificates (NSC, Behbood, DSC, RIC). Enter the amount invested, that is the face value of all your certificates and National Savings accounts added together. If you follow View 2 above, add accrued profit too.
3. Enter prize bonds in the Prize bonds field at face value.
4. Fill in gold, silver, bank balances, cash and any short-term debts as usual.
5. Tap Already paid and enter any zakat that National Savings or your bank deducted from your certificates or accounts for this year. The calculator subtracts it from your zakat (not from your wealth) and shows what is still to pay.

You can also type a quick sentence such as “10 lakh dsc, 5 lakh behbood”; the calculator recognises NSC, DSC and Behbood and puts them in the certificates field.

Worked example: DSC, Behbood and gold

Nasreen, a widow in Lahore, follows the Hanafi madhab. On her zakat date she holds (all amounts are examples):

• Rs 10,00,000 invested in Defence Savings Certificates, with about Rs 3,00,000 of accrued profit built into the encashment value.
• Rs 5,00,000 in Behbood Savings Certificates.
• Gold jewellery which, at today’s rate, is worth Rs 6,00,000 (example value; the calculator uses the live rate of about Rs 4,20,971 per tola of 24K).
• Her DSC statement shows Rs 25,000 deducted as zakat for this year.

If she follows View 1 (principal only):

Item	Amount
DSC principal	Rs 10,00,000
Behbood principal	Rs 5,00,000
Gold	Rs 6,00,000
Total zakatable wealth	Rs 21,00,000
Zakat at 2.5%	Rs 52,500
Less: DSC deduction (Already paid)	Rs 25,000
Still to pay	Rs 27,500

She would also give away the Rs 3,00,000 of DSC profit (and the monthly Behbood profit she has received) to the poor without intending reward, according to the scholars who hold this view.

If she follows View 2 (principal plus accrued profit): her wealth is Rs 24,00,000, zakat is Rs 60,000, and after the Rs 25,000 deduction she still owes Rs 35,000.

Notice that nothing was deducted from the Behbood certificates, yet they are the reason she owes more. Many families assume that “no deduction” means “no zakat” and underpay for years. If that has happened to you, see the guide on missed zakat from past years.

Widows, pensioners and senior citizens

Behbood certificates are open to senior citizens over 60, widows, disabled persons and special minors, and the Pensioners’ Benefit Account to retired government pensioners. The government exempts these from compulsory deduction because the holders often depend on the monthly profit. But Islamic law looks at the person’s total wealth, not at the scheme:

• If a widow’s certificates, gold and cash together are below the nisab, she owes no zakat, and she may even be eligible to receive it. See who can receive zakat.
• If she is above the nisab, she owes 2.5% on the total, including her Behbood or PBA principal, and pays it herself.
• Zakat is due on each person separately. A mother’s Behbood certificates are her zakat, not her son’s, even if the son manages the paperwork. A son may pay his mother’s zakat on her behalf with her permission.
• Pension that you have spent on living costs is not counted; only what is left on your zakat date.
• Gold jewellery a widow wears is zakatable in the Hanafi view but not in the Shafi’i, Maliki and Hanbali views. See zakat on jewellery.

How to avoid paying twice (or not at all)

• Collect your deduction records. Ask for a statement from National Savings or your bank showing every zakat deduction on your certificates and accounts, with dates.
• Match the deduction to the year. A deduction made at encashment may cover earlier Ramadans. Only count against this year what relates to this year; anything relating to earlier years counts against those years’ zakat.
• Count every scheme, deducted or not. Behbood, RIC, PBA and prize bonds need to be added by you.
• Do not count the deduction as wealth. The amount cut is gone from your account; enter it under Already paid, not as savings.
• Use one zakat date. Your own zakat date (your hawl) may not be 1 Ramadan. Value everything on your own date and simply subtract what the state took during that year. See your hawl and zakat due date.

Small amounts follow the same 2.5% rule: Rs 1 lakh in a certificate means Rs 2,500, as in zakat on 1 lakh rupees, provided your total is above the nisab.

What to do now

1. List every National Savings certificate, account and prize bond held by each person in the family, with face values.
2. Get the zakat deduction records for this year from National Savings or your bank.
3. Decide, with your scholar, whether you count accrued profit.
4. Enter everything in the Pakistan zakat calculator, put deductions under Already paid, and pay what is still due to eligible recipients.

This guide is general information. For your own holdings, especially large ones or past years’ interest, please ask a qualified scholar.

Frequently asked questions