Circling back to the question if zakat on ASB is calculated based on the total value, the principal value or only the interest value, let’s see the excerpt that has been shared by the Shariah Unit Manager of the Zakat Collection Center – Islamic Religious Council of the Federal Territory (PPZ-MAIWP), Ahmad Husni Abdul Rahman, as appearing in the Sinar Harian news portal.
According to Ahmad Husni, the calculation of zakat for ASB using its own capital and the calculation of zakat for ASB based on loan financing are different. In fact, there are actually several ways zakat is calculated on ASB investments.
The ways of calculating zakat on ASB investments are as in the following examples:-
ASB investment is made using own money or capital: The calculation method is based on the amount of capital mixed with dividends earned.
Example:-
RM100,000 (investment capital) + RM7,250 (example dividend of 7.25%) + RM100 (1% of the first 10,000 units) = This is the amount that is subject to zakat, which is RM107,350.
At a rate of 2.5%, the amount of ASB zakat that must be paid is as follows:
RM107,350 x 2.5% = RM2,683.75
ASB investments obtained through loan financing: For ASB investments made through loan financing from banks, zakat is only charged if the amount of dividends exceeds the nisab in that year.
Examples of how to calculate:
The investment capital is as much as RM100,000 (in the form of an investment certificate). For example, the dividend is taken as 7.25%, and is added with an ASB bonus of 1% from the first 10,000 units. Therefore, in this calculation example, dividend + bonus of = RM7,350.
At the rate of 2.5%, the zakat payable is calculated as follows:-
2.5% x RM7,350 = RM183.75
It may be seen here that the value of RM7,350 is far from the usual nisab level (for example, in the state of Selangor for July-December 2022, the nisab rate is RM21,432). However, often zakat is imposed on investments unless the amount of other property owned by the investor is insufficient for nisab and the ASB investment is the only property owned.
Calculation of zakat for investors who close an investment account through financing: If the surrender rate exceeds the nisab, then ASB zakat must be paid on the value of this surrender.
Examples of how to calculate:
The surrender value of the certificate in the final year of financing is as much as RM100,000. An example of a dividend is taken as much as 7.25%. In this example, the dividend is = RM7,250.
At the rate of 2.5%, the zakat payable is calculated as follows:-
2.5% x (RM100,000 + RM7,250) = RM2,681.25
If you are not sure which calculation to follow for your investment, check up and confirm how you earn profit from your ASB investment. Then, you can use Bayar Zakat Malaysia‘s ASB zakat calculation calculator to determine the amount to be paid and then you can continue to pay at here.
In the meantime, don’t forget to make sure of the proper nisab rate because it varies every year and also varies according to the religious department in each state.