Zakat on shares in Pakistan: nisab, rate, and mistakes
Today's silver-standard nisab in rupees, what counts as zakatable in a PSX portfolio, the 2.5% rate, the CDC deduction most people misread, and when to pay.
Zakat on shares is 2.5% of the value of your holdings, due once a lunar year, if your total zakatable wealth has stayed above the nisab for that year. The nisab most scholars apply to cash and shares is the silver standard, 612.36 grams of silver, which as of 6 Sep 2026 (Equivest’s feed last fixed the price on 4 September) is Rs 366,542 at Rs 598.57 per gram. A portfolio worth Rs 1,000,000 plus Rs 50,000 cash in the broker account owes Rs 26,250. The compulsory deduction the company takes from your dividends does count toward that figure, but it is a small fraction of it, and mistaking one for the other is the most common error.
The nisab in rupees today
Nisab is the wealth threshold below which zakat is not due. Classical fiqh sets it in metal: 87.48 grams of gold or 612.36 grams of silver (the 52.5 tola figure most Pakistani scholars quote). For cash, bank balances and shares, the silver standard is the one generally applied, because it is the lower of the two and therefore the more cautious: more people qualify to pay.
Because silver is priced in dollars and the rupee floats, the nisab moves every day. Here is the live calculation behind Equivest’s figure.
| Input | Value as of 6 Sep 2026 |
|---|---|
| Silver quantity | 612.36 g (52.5 tola) |
| Silver price | USD 67.108 per troy ounce |
| Exchange rate | Rs 277.43 per USD |
| Silver in rupees | Rs 598.57 per gram |
| Silver-standard nisab | Rs 366,542 |
The gold-standard nisab works out several times higher in rupees, which is why it matters which one you use: someone with Rs 500,000 in shares is above the silver nisab and clearly owes zakat, but might tell themselves they are below gold. The precautionary view is silver. If you want a second reference, the State Bank of Pakistan announces the nisab for compulsory bank deductions before each Ramadan; it is computed on the same silver basis.
What counts in a share portfolio
Zakat is due on wealth held for growth or trade. For a PSX investor that means the current market value of shares, cash sitting in the brokerage or CDC account, dividends received and not yet spent, and money committed to an IPO subscription that has not been refunded. Debts falling due within the year (a margin loan, an unpaid credit-card balance) are deducted first.
Valuation is at market on your zakat date, not at cost. If you bought HUBC at Rs 150 and it trades at Rs 207, zakat is on Rs 207. If you bought at Rs 250, it is still on Rs 207. Unrealised loss does not reduce the obligation below what the shares are worth today, and unrealised gain does not escape it.
There is a well-known scholarly distinction between shares bought to trade and shares bought to hold for dividends. For trading positions, the ruling is straightforward: 2.5% of market value. For long-term holdings, a number of scholars hold that zakat is due only on your proportional share of the company’s zakatable assets (cash, receivables, inventory) rather than on fixed assets like plant and land, which in practice is often approximated as a percentage of market value. Others apply market value to everything. Equivest’s default is full market value, which is the higher figure; a long-term investor following the proportional view can adjust the number, and should ask a qualified scholar rather than a blog which view to follow.
Shariah compliance of the stock itself is a separate question. Zakat is due on a holding whether or not the company passes the KMI screen; the KSE-100 versus KMI-30 guide explains how that screen works.
The CDC deduction most people misread
Pakistan’s Zakat and Ushr Ordinance 1980 requires companies to deduct zakat at source when they pay dividends. The deduction is 2.5% of the paid-up value of your shares, meaning the face value, usually Rs 10, and it is taken out of the dividend unless you have filed a CZ-50 declaration claiming exemption.
The arithmetic on 1,000 shares of Pakistan Oilfields (POL), which as of 6 Sep 2026 trades at Rs 730.21 and has a Rs 72.50 final dividend on the calendar:
| Amount | |
|---|---|
| Face value of 1,000 shares | Rs 10,000 |
| Compulsory zakat deducted from the dividend (2.5% of face) | Rs 250 |
| Market value of 1,000 shares | Rs 730,210 |
| Zakat due on market value (2.5%) | Rs 18,255 |
| Still to pay yourself | Rs 18,005 |
The Rs 250 is real zakat and can be netted off. But the Ordinance’s deduction was designed around face value decades ago and has never been indexed to market prices, so it covers about 1.4% of what is due on this holding. Anyone who assumes “the company deducts my zakat” is under-paying by roughly seventy times. Companies that pay no dividend deduct nothing at all. The dividend mechanics post shows where this deduction appears on a payout notice.
Common mistakes
Beyond the deduction confusion, the same handful of errors come up every year.
Using cost instead of market value is the most frequent. Your broker’s screen shows both; zakat uses the second column.
Forgetting cash and dividends. Cash in the broker account waiting to be deployed is zakatable, and so is a dividend that landed last week. Investors who track only shares under-count.
Picking the gold nisab to fall below the threshold. Nisab exists to exempt the genuinely poor, not to let a five-lakh portfolio opt out. Use silver.
Not deducting short-term debts. The obligation is on net wealth. A margin loan that has to be repaid this year reduces the base; a long mortgage generally does not.
Ignoring the hawl. Zakat is due once wealth has stayed above nisab for a full lunar year, about 354 days. The trigger is the anniversary of the date you first crossed the nisab, not 1 Ramadan, though many people choose Ramadan for the reward of giving then. Whichever date you pick, keep it fixed year to year.
Double-counting a deduction that was never made. Check the dividend advice from your broker or the CDC statement before crediting yourself with a Rs 250 deduction; if you filed a CZ-50, none was taken.
When to pay
Pay on your hawl anniversary, valued as of that day. If you are paying in Ramadan for the first time, that becomes your date going forward. Compute the figure on that morning using closing prices from the previous session, subtract the compulsory deductions already taken from your dividends during the year, and pay the balance to the recipients or institutions you have chosen. Keep the working; it is the easiest way to see next year whether your obligation is growing with your portfolio.
How Equivest helps
The nisab tool shows the live silver-standard nisab in rupees, recomputed daily from the silver price and the exchange rate, with the inputs visible. Inside the app, the zakat calculator values your tracked holdings at market on your chosen anniversary, adds cash, subtracts the debts you enter, compares the total against that nisab, and shows 2.5% of the net figure with a countdown to the date. It is a calculation aid; for the choice between full market value and the proportional view, ask a scholar.
This is education, not investment advice.