Home » Hanafi Fiqh » ShariahBoard.org » What say the eminent muftis regarding the 401k plan, which is a fund instituted from the government, related to the retirement. Every month some of the income is deducted to deposit that amount in the fund, one can not touch that fund until the age of 59.5, so, the question is when some one receives that amount would he/she have to pay zakat on the received amount immediately or after a complete year of time.

What say the eminent muftis regarding the 401k plan, which is a fund instituted from the government, related to the retirement. Every month some of the income is deducted to deposit that amount in the fund, one can not touch that fund until the age of 59.5, so, the question is when some one receives that amount would he/she have to pay zakat on the received amount immediately or after a complete year of time.

Answered as per Hanafi Fiqh by ShariahBoard.org
What say the eminent muftis regarding the 401k plan, which is a fund instituted from the government, related to the retirement. Every month some of the income is deducted to deposit that amount in the fund, one can not touch that fund until the age of 59.5, so, the question is when some one receives that amount would he/she have to pay zakat on the received amount immediately or after a complete year of time.
If the person is owner of nisab from before then that person doesn’t have to wait for the one year period, whatever nisab that existed from before would be incorporated in this new amount and zakat should be given on the sum. Otherwise, if at the time of receiving this amount the person is not the owner of nisab then he/she would wait for one year and then zakat would be wajib on him/her.
Allah (Subhanahu Wa Ta’ala) Knows Best

Mufti Nawal-ur-Rahman

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This answer was collected from Shariahboard.org. It was established under the supervision of the eminent faqih of our era, Hazrat Shah Mufti Mohammed Navalur Rahman damat barakatuhum.

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