It was still not clear how I should pay zakat on my profit sharing pension plan. Is it on principle or on capital gain in any perticular year if there is some after deducting expences?
Answer:
Regarding pension (or 529 fund), please review our discussion under "401-k" on page 50. The basic question to be asked is whether this fund is accessible to you or not. If yes, then this should be subject to zakat every year.
Otherwise, it is subject to zakat only when the fund is available for use. This is the view of Dr. Yusuf al Qaradawi, which we have adopted in our book.
There are other scholars, such as Dr. Muzammil Siddiqui, who are of the opinion that such fund should be subject to zakat every year if it reaches nisab and at least a year is passed on it.
Allah knows best.
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