Planit:Calculating Zakat Due Exercise Answer Key

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Question One:

Tasnim currently has RM 65,000 in her EPF account with you, and Karim has RM 233,000 in his EPF account managed by you. They jointly own RM 46,000 in a joint brokerage account. They bought a house years ago that is now valued at RM 600,000. They have also accumulated other personal affects worth RM 85,000. They would like you to include their zakat due on wealth for all their wealth accumulated so far.


Answer:

On the Assets and Liabilities screen, the clients’ holdings will only be entered at the summary level. So, from what they told us of their assets, we can:

  1. Enter the RM 233,000 value of Karim’s EPF under the Karim EPF.
  2. Enter the value of the managed, joint non-EPF investments (RM 46,000) under the Non-EPF investments
  3. Enter the RM 65,000 value of Tasnim’s EPF under the Tasnim EPF.
  4. Enter the total value of their personal use assets under Personal Use non-registered investments. So the value of the house (RM 600,000) the other assets (RM 85,000) and the total RM 685,000.
  5. Click Save.

You will also need to calculate the zakat due on wealth for the client and spouse individually, to include it in Personal Use Liabilities.

  1. Calculate the total value of all assets subject to zakat for Karim:
50% of the joint non-EPF account worth RM 46,000 = RM 24,000
+ 50% of the joint brokerage account for RM 165,000 = RM 82,500
= RM 105,500 total

Personal Use assets (with the exception of gold) are not subject to zakat because they are not used with the purpose of generating income. Other accounts are not subject to zakat because of unclear ownership of the assets: this is the case for the EPF accounts.

  1. Since this total value is over the RM 8,500 Nisab, multiply the entire amount by 2.5%. (The answer should be RM 2,637.50)
  2. You can repeat these steps for Tasnim. She will have the same accounts and account values subject to zakat (50% of the joint non-EPF account + 50% of the joint brokerage account), so her zakat due will also be RM 2,637.50.
  3. The total Personal Use Liabilities will be the sum of the zakat due (2,637.50 x 2 = RM 5,275). Enter this amount.
  4. Click Save underneath the accounts.
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