Zakat & Population Welfare Department

ZAKAT SYSTEM- AN INTRODUCTION

1. Introduced formally on 20 June, 1980 through and Ordinace titled "ZAKAT AND USHR ORDINANCE 1980"

2. System relies on Zakat deductions @ 2.5 % from 11 Cetegories of Assets listed in the first schedule of Ordinance.

MAIN SOURCES OF ZAKAT

i) Saving Bank Accounts (Option given in compliance to Superime Court Judgement).
ii) Notice Deposit Receipts and Accounts.
iii) Fixed Deposit Receipts and Accounts (e.g. Khas Deposit Certificate).
iv) Savings / Deposit Certificate (e.g. Defence Saving Certificates. National Deposit Certificates).
v) Units of the National Investment Trust (NIT).
vi) I.C.P Mutual Fund Certificates.
vii) Government Securities (other than prize bonds).
viii) Securities including shares and debentures (e.g. T.F.C).
ix) Annuities.
x) Life Insurance Policies.
xi) Provident Fund.

EXEMPTIONS FROM ZAKAT

i) Assets of Non-Muslims.

ii) Assets of persons who are not citizens of Pakistan.

iii) Assets of certain companies, whose maority shares are owned by foreigners.

iv) Assests of persons who file declaration on account of faith and fiqh.

v) Assets of persons excluded form the definiton of Sahib-e-Nisab (Trusts, Govt, owned corporations etc).

vi) Frozen Assets.

vii) Assets fo dead persons.

viii) Assets acquired in foreign currency and

ix) Assets created from debt. 1616.

GUZARA ALLOWANCE.

Istehqaz shall be dtermined by the Local Zakat Committee Concerned.

Payment Shall be made to mustahqeen through crossed cheques by the respective Local Zakat Committee.

The rate of Guzara Allowance shall be Rs. 500/- per month per mustahiq.

EDUCATIONAL STIPENDS.

Provision of Zakat Assistance: Zakat assistance may be provided through such schools, colleges, universities, polytechnic and other educational training and professional insittutions in Pakistan as are established or recognized by the Government or established in the private sector purely for charitable or social welfare purposes, provided that documents in support of their claim are furnished alongwith the application for grant of zakat assistance.

Istehqaq of a student shall be determined by the Local Zakat Committee. The student (both boys & girls) will have the option to apply for the Istegqaq Certificate either:-

by himself / herself.
through his / her parant / guardian.
through the Head of Educational Institution.

For this prupose the student will use a perscribed Zakat Scholarship form titled "MORA Scholarship" Form No.MORA-I.

The second part of the form relating to Istehqaq will be signed by Chairman Local Zakat of the area of which the student is a permanenet resident. Istehqaq certificate for scholarship purposes will be completed by the Local Zakat Committee wihtin 30 days of the receipt of MORA Scholarship Form and returned to applicant or sender by retaining one copy for office record.

In case Istehqaq certification from a Local Zakat Committee, is not received even after lapse of prescribed limit of thrity (30) days, the MORA Shcolarhsip Committee shall report, in writing, to the concerned District Zakat Committees (DZC) requesting to advise defaulting Local Zakat Committee for quick response. Simultaneously the MORA Scholarship Committee, after satisfying itself about the facts, shall be competent to grant scholarship provisionally to the mustahiq students until the requisite certificate is issued or declined by the Local Zakat Committee as the case may be.

In addition, the Local Zakat Committee of the area where the educational institution is located will also be competent to issue istegqaq certificates to eligible students (as decided by 89th Central Zakat Concil on 6.6.2003)

The rate of stipends as approved by the Central Zakat Council in its 84th meeting held on 26th Jan, 2002 shall be as follows:-

S. No	Level of Education	Rs. Per Month
I	From Primary to Middle	75
II	High School	112
III	Intermediate and Graduate Level	375
IV	Post Graduate	750
V	Engineering / Medical College and Engineering Universities	374
VI	Computer Science	874

The stipends shall be paid in the form of "Zakat Annual Grant: to the educational institution recommended by the concerned District Zakat & Usher Committee (D.Z.C) and approved by the Provincial Zakat Council (P.Z.C). In determining the size of annual grant, the D.Z.C will follow the guideline formula given below:

(i) Number of Students certified as eligible for MORA Scholarship by the Local Zakat Committee.

(ii) Number of students recommended for MORA Scholarship by "MORA" Scholarship Committee" of the Educational Institution calculated on the basis of their Level of Education (pertaining to each Scholarship) and its amount.

(iii) Total financial effect of the proposal for one academic year. The table in Form MORA 2 will be used to calculate the size of grant to an educational institution.

MORA Scholarship Committee will hold Performance Review Meeting every six months. Depending upon the performance of the student, the Committee will decide whatever to continue the scholarship or cancel it for the remaining period. A list of students deleted form the scholarship programme will be supplied to the District Zakat & Usher Committee and funds relating to them will be refunded to District Zakat Fund. The scholarship will be renewable for the next academic year subject to approval of District Zakat & Usher Committee for additional funds needed due to promotion of the student to the higher class and thereby to a higher stipend bracket.

The following procedure will be followed for making payment of MORA Scholarship to a deserving student:
Step- 1            After approval of Annual Zakat grant for an institution by the Provincial Zakat Council, the concerned District Zakat & Usher Committee will release it on biannual basis, ensuring that the first installment is transferred to the institution within 30 days of the commencement of academic year in that institution. For the purpose of release of grant, the DZCs will issue crossed cheques in the name of Head of Institution (by designation) or to a person nominated specifically for this purpose by that institution.

Step-2             On receipt of the cheque, the Head of the Institution will open a current account in a scheduled bank titled "MORA Scholarship Bank Account". It will be operated jointly by the Head of Institution and the Officers so nominated.

Step-3              Within 15 days of the receipt of MORA Scholarship Grant, the MORA scholarship Committee will hold a meeting to disburse the scholarship to student approved by the Provincial Zakat Council. The payment shall be made in cash on montlhy basis, under a prescribed receipt duly singed by the student. The specimen of the receipt will be as in Form MORA-3. The composition of MORA Scholarship Committee Shall be as under:-

(i) Head of Institution.

(ii) Class Teacher.

(iii) Nominated member of District Zakat & Usher Committee, or Chairman Local Zakat Committee within whose jurisdiction the institution is located or a member of that committee (DZC) nominated by the Chairman District Zakat Committee.

Step-4 A proper record for audit purposes will be maintained of the total grant received and payments made monthly. The following particulars of the student will be recorded in the Register of Payments.

Name of students.
Father’s Name
Permanent Address.
Name of L.Z.C which certified Istehqaq.
Istehqaq Certificate Number.
Amount of annually payment.
Amount of monthly payment.
Remarks on the performance of the student.

Step-5 Payment of scholarship shall be on the principle of Tamleek. On receiving payment, the student will use it for the following purposes only:

Fees.
Course Books.
Course Stationery.
Study Material.

The Zakat funds shall be disbursed by the District Zakat & Ushr Committee according to following proportion:

I	Primary to Metric	50%
II	Science, Arts & Professional Education	25%
III	Higher Education	25%

At least 25% scholarships at all levels are earmarked for mustahiq girl students.

The Mustahiq Student of Arts from Metric to Post graduate level will also eligible for stipends from Zakat Funds.

The stipend sanctioned for a student shall be discontinued on the recommendations of MORA Scholarship Committee under intimation to the father / guardian and the Local Zakat Committee concerned if his / her conduct or performance is found to be unsatisfactory.