Draft Waqf Rules propose steep cut in annual contributions to State Waqf Boards

The State Waqf boards may find themselves in a deep financial crisis shortly with the draft rules for the Waqf Amendment Act 2025 proposing a steep cut in annual contribution from the individual Waqfs to the boards, it is feared.

The draft rules, which are being circulated among the State governments and the State boards, have proposed to fix the maximum amount annually payable by the individual Waqfs to the board at ₹5,000.

Incidentally, the Waqf Act 1995 had insisted that an amount not exceeding 7% of the net annual income of the Waqf shall be paid as the annual contribution to the board. The lower ceiling for the payment was fixed as an amount which was not less than ₹5,000.

However, the recently enacted Waqf Amendment Act 2025 had reduced the payment to 5% of the net annual income and left it to the government to decide on the maximum amount payable to the boards.

The draft rules have fixed the maximum annual contribution payable to the board under Subsection (1) of Section 72 of the Act as ₹5000, pointed out board sources.

1995 Act

The 1995 Act had specified that the net profit derived by any Waqf from its remunerative undertakings shall be taken as its income. It had exempted the grants given by the government or any local authority, or donations received from the public, or fees collected from the pupils of educational institutions for non-remunerative undertakings such as schools, colleges, hospitals, poor-homes, orphanages or any other similar institutions from calculating the annual income, the sources said.

A major share of the funds for the activities of the State boards comes from the contribution of the individual Waqfs, as the State government offers a meagre amount from its coffers for the Boards to operate, according to a Kerala Board official.

The average annual income of the Kerala Waqf Board is estimated to be around ₹15 crore. As many as 12,000 individual Waqfs have been registered with the State board. The registration of a large number of Waqfs is pending with the State Board.

Although the Act mandates that the mutawallis of individual boards make the annual contribution, a large number of them have defaulted on payments, and the board has initiated action against them, the official pointed out.