Is zakat due on Mutual Funds investments that are in a RRSP (Registered Retirement
Savings Plan) account? If yes, then is it due on the total value or only on that portion
which will be available after Income Tax has been deducted at source?
(RRSP is the Canadian equivalent of the U.S. 401K Plan. Under this scheme, one can
save money towards future retirement income and defer current Income Tax on the
portion of the income that is being saved in the plan. The deferred income tax is later
deducted at source when the funds are eventually withdrawn from the plan; however,
since the withdrawals are usually done after retirement (when there is no other
significant source of income), one ends up being taxed at a substantially lower tax rate.
Naturally, withdrawal prior to retirement will incur higher tax rates.)
