Zakaat is a pillar of Islam and an
obligatory act of charity ordained to every eligible Muslim. It is an act of
devotion and an effective form to achieve social justice. It is also one of the
five pillars of Islam and prescribed in the Holy Quran and in the Hadiths. The
root of the word Zakaat in Arabic means blessing,
growth, purity or improvement. The word Zakaat refers
to the part of the wealth prescribed by Allah to be distributed among the
categories of people described by Allah in Surah At-Taubah (Chapter 9, verse 60)
and the Hadiths. Zakaat is an act of worship that
purifies the wealth and soul of Muslims.
The
purification of wealth means the mobilization of goods for financial growth and
justified distribution (equal repartition of wealth). Purification of the soul
means liberation of the Muslim’s heart from hatred, jealousy, selfishness, and
greed.
Technically speaking, Zakaat is
a fixed proportion that is withdrawn on an annual basis from the wealth and
distributable profits and given to beneficiaries of this fund (as indicated by
the Quran and Sunnah) for the well-being of Muslim
society. Zakaat is calculated on the net balance after
the Muslim has deducted his expenses for personal, family and other purposes
(necessities). At the end of the year if the Muslim is in possession of 85
grams of gold or 595 grams of silver or the cash equivalence or article of
commerce he must pay Zakaat on it at 2.5% tax, also
applicable to agricultural products and livestock.