Zakāt (زكاة Zakāh/Zekat) is one of the Five Pillars of Islam and it refers to giving of 2.5% of one’s possessions (surplus wealth) to charity, mainly to the poor and needy. It is the duty of Muslims not just to collect Zakāt but to distribute it fairly as well.
Zakāt can be simply put as sharing of one’s material & financial wealth to help others.
Zakāt is an act of worship undertaken as a means of spiritual purification, as it can absolve a Muslim of some of their sins.
Zakāt is obligatory for all Muslims.
Muslim jurists agree that Zakāt is obligatory on the Muslim who has reached puberty, who is sane, who is free, and who owns the minimum assigned nisab (نِصاب niṣāb).
(In Sharia Law (Islamic Jurisprudence) nisab (نِصاب niṣāb) is the payable amount, which savings or capital or product must exceed in order for the Muslim owner to be obliged to give zakat. In general, niṣāb is considered an amount equal to the essential needs of a person or family for one year).
Who is entitled to receive Zakāt?
1. The needy (Muslims), Fuqara’
2. Extremely poor (Muslims), Al-Masakin
3. Those employed to collect, Aamileen
4. Those whose hearts are to be won, Muallafatul Quloob
5. To free the captives, Ar-Riqaab
6. Those in debt (Muslims only), Al Ghaarimeen
7. In the way of Allah, Fi sabil Allah
8. Wayfarer (Muslims), Ibnus-Sabeel
It must be noted that Prophet Muhammad (صلي الله عليه وسلم) lived his life at a level so simple and basic that such were his needs and possessions that he never qualified for the nisab due to his donating most of his earnings on a daily basis to help others.