“And establish prayer and give Zakat, and whatever good you put forward for yourselves – you will find it with Allah.” (2:110, Qur’an)
Zakat is the third of the five pillars of Islam. The other four include a declaration of faith, prayer, fasting, and Hajj. The other name of Zakat is al-sadaqa al-wajiba (obligatory alms). In Arabic, the literal meaning of the word Zakat is ‘to cleanse’. Paying zakat is, thus, is to purify wealth as per the will of Allah (SWT) and to seek His blessing. The Holy Prophet Muhammad (peace be upon him) said:
“Whoever pays the zakat on his wealth will have its evil removed from him.”
(Ibn Khuzaimah and at-Tabaraani)
Zakat is compulsory on every sane and adult Muslim who possesses a certain amount of wealth. However, this wealth should be above the threshold amount or Nisan according to Shariah) for a whole lunar year. The other conditionalities for the imposition of Zakat include the person is not in debt. His wealth should exceed what he needs to meet the basic needs of life.
In a nutshell, Zakat is obligatory on all those adult Muslims who earn more than their daily needs require. Zakat is not a voluntary charity. There are clear directions about paying zakat. The charitable gifts one presents to someone out of love, kindness or generosity are not Zakat.
Islamic Shariah designates a clear threshold figure (or Nisab) at which paying Zakat becomes obligatory. It is a cash equivalent of 3 ounces/87.48 grams of gold or 21 ounces/612.36 grams of silver. For calculation of the monetary value of gold and silver, one should apply only the current rates. There are four types of assets on which Zakat is obligatory:
The Zakah rates on different assets vary. It is 2.5% of the wealth in one possession for a lunar year. It is 5 percent on things that one produced by the blending of labor and capital. Zakah is 10 percent on items one produces involving only labor or capital and it is 20 percent on items which are a gift of Allah (SWT). Paying Zakat is obligatory once a year. In an Islamic state, a systematic and a full-fledged institution maintains collection and distribution of Zakat.
Allah (SWT) says in the Holy Qur’an:
Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler – an obligation [imposed] by Allah. And Allah is Knowing and Wise.
(Surah Taubah – Verse. 60)
Hence, according to the Holy Qur’an, there are eight categories of people who are the beneficiaries; the poor, the needy, those who collect Zakat, those whose hearts to be conciliated, people in debt, those who are working in the cause of Allah (SWT) and the travelers (You can give zakat to poor Hajj and Umrah traveler). There is no condition of paying Zakah to one specific category. You can distribute or give the entire amount to one individual/s belonging to one category.
The importance of Zakah is manifested by its repeated mention in the Holy Quran (mentioned with Salat twenty-eight times). It provides a pathway to purify and cleansing one’s income and wealth and gain Allah’s reward and blessing. Contrarily, not paying Zakah can cause displeasure and punishment from Allah the Almighty not only in life on the Earth but also in the world hereafter.
At the individual level, Zakah strengthens a believer’s devotion and subservience to Allah (SWT). At the societal level, Zakat reinforces Muslim brotherhood, fraternity, economic stability, and cohesiveness. Zakah benefits those who have meager income and lesser resources and find it hard to make both ends meet. Moreover, it ensures a flux of wealth from the rich in society to the poor masses to enhance their lifestyle. Thus, encourages the circulation of money in society. It discourages amassing of wealth in few hands while the poor face misery and plight.
By ensuring support to the underprivileged and disadvantaged, Zakah lays the foundation of an egalitarian and welfare state. Unlike the secular economic systems, the institution is based on a great principle that everything belongs to Allah (SWT) and man is just His viceregent. Everything he has is just due to the blessing of Allah the Almighty. This his duty to seek Allah’s blessing bu helping others.