BY: SELANGOR ZAKAT BOARD
Understanding the difference between ZAKAT and TAX
As you already know, zakat is one of the pillars of Islam and must be paid by all Muslims who meet the requirements (haul and nisab). Meanwhile, Income Tax is imposed by the government on people who are eligible to be taxed. Both are paid to authorised government institutions.
Zakat is used to develop the Muslim economy and help the asnaf (eligible zakat recipients) to live like other people and also help other asnaf too.
Tax, on the other hand, is used to develop the country. For example, to build infrastructure and other facilities. The question is: Is a Muslim required to pay both zakat and tax?
In Malaysia, the constitution through the Income Tax Act (ACP) 1967, Section 6A (3) provides some privileges to Muslims.
The Act says: “Rebate shall be granted for any zakat fitrah or other claims in Islam, for which payment is required in the years of assessment, and have been paid in the base year for that assessment year; and has to be proven by receipt issued by religious authorities established by written laws”.
Therefore, Muslims who wish to gain the benefit of this rebate must pay their zakat BEFORE December 31, every year. What does this rebate mean? Generally, it means the amount of tax that can be reduced by zakat payment.
The more zakat contribution given, the less tax is paid. If the zakat amount matches or exceeds the payable tax amount, the individual is no longer required to pay his income tax.
In a Malaysian context, the government has aligned zakat and income tax with rebates offered on zakat paid by Muslims. There is no limit. No matter the amount of zakat, it will be deducted from the amount of payable tax.
The conditions are that zakat is paid in the respective assessment year, which is before December 31 each year, with a receipt from the authorised zakat institution in each state.
Therefore, pay your zakat at any of the 28 branches before December 31 to fulfil your obligations and entitle yourself to the TAX REBATE. Zakat Selangor branches are open on December 31 from 8.30 am – 8.00 pm.
Zakat can also be paid online at https://fpx.zakatselangor.com.my/, any internet banking facility, bank counter and post office; and to any IPTA assistant amil, or zakat collection agent.
Why pay zakat before December 31?
