It’s a Shari’ah-compliant pension plan from IGI Life and Mahaana Wealth. You save for retirement, get up to 20% tax savings, Takaful coverage (life insurance and emergency medical help with a PKR 1,000,000 balance), and expert investment management. Your money is secure with the Central Depository Company (CDC), and you can track it 24/7 via the Mahaana portal or app.
How does tax saving work?
Simple: if you put 20% of your monthly income into the fund, your income tax bill drops by 20%. The tax credit equals your contribution (up to 20% of your annual income) times your effective tax rate (total tax ÷ income). For example: - Earn PKR 500,000 monthly (PKR 6,000,000 yearly), pay PKR 85,458 monthly tax (PKR 1,025,500 yearly, 17.09% rate per 2025–26 slabs). - Contribute PKR 100,000 monthly (20% of income, PKR 1,200,000 yearly).Tax credit = PKR 1,200,000 × 17.09% = PKR 205,080 yearly (PKR 17,090 monthly). - Your monthly tax drops from PKR 85,458 to PKR 68,368—a 20% reduction.
Does this 20% tax cut work for everyone?
Yes, but only if you pay income tax in Pakistan. How it works: Whatever percentage of your taxable income you contribute, your income tax goes down by the same percentage. Examples: Lower income: If you earn PKR 100,000 monthly (PKR 1.2 million yearly):Your tax: PKR 6,000 per yearIf you contribute 20% of income (PKR 240,000): You save PKR 1,200 in taxes (PKR 100 monthly) Higher income: If you earn PKR 1,000,000 monthly (PKR 12 million yearly):Your tax: PKR 3,025,500 per yearIf you contribute 20% of income (PKR 2.4 million): You save PKR 604,100 in taxes (PKR 50,342 monthly). Important: If you contribute less than 20% of your income, your tax savings are reduced.For example, contribute 10% of income = get 10% tax reduction instead of 20%.
What if I contribute less than 20% of my income?
Your tax credit shrinks proportionally. For example, with PKR 500,000 monthly income (PKR 85,458 monthly tax): - Contribute PKR 50,000 monthly (10% of income, PKR 600,000 yearly). - Tax credit = PKR 600,000 × 17.09% = PKR 102,540 yearly (PKR 8,545 monthly). - Your tax drops by 10% (PKR 85,458 to PKR 76,913 monthly). The rule: your tax cut percentage matches the percentage of income you contribute, up to 20%.
How do I claim the tax credit?
Download your account statement from the Mahaana portal, showing your VPS contributions for the year. Submit this to your HR/Accounts department to claim tax credits. The credit lowers your tax bill directly.
What happens if I withdraw money before retirement?
Withdrawing before age 60 or 25 years from the start of your investment (whichever comes first) comes with a cost: - The Pension Fund Manager (via NCCPL) deducts a withholding tax equal to your average tax rate for the preceding three years, calculated from the last three tax return statements you attach in the Mahaana portal when requesting withdrawal.
Can I contribute more than 20% of my income?
Yes, but the tax credit caps at 20% of your taxable income. Extra contributions still grow tax-free in the fund, boosting your retirement savings.
What’s the tax benefit at retirement?
At age 60, you can withdraw up to 50% of your fund balance tax-free (based on current rules). The rest can fund a monthly pension or stay invested, but these payments may be taxable.
Is the fund Shari’ah compliant?
100%! It follows Islamic principles, avoiding interest (riba) and non-halal industries like alcohol or gambling.
What if I switch jobs or stop working?
Your fund stays with you! You can keep contributing via the Mahaana portal. It’s your money, safe with the CDC, and you control it.
Who is this product ideal for?
The Mahaana IGI Islamic Retirement Fund is perfect for long-term investors in the salaried class who are tax filers in Pakistan. It’s designed for those earning above PKR 600,000 annually who want to save up to 20% on their taxes while building a Shari’ah-compliant retirement nest egg. The tax credit is especially attractive for higher earners (e.g., PKR 500,000 monthly income saves PKR 17,090 monthly in taxes with a 20% contribution).
