It is an obligation of every Muslim, man or woman to give a specific amount of their wealth to certain categories of people. Allah said in the holy Quran: “Alms are for the poor and the needy, and those employed to administer the (funds); for those whose hearts have been (recently) reconciled (to Truth); for those in bondage and in debt; in the Cause of God; and for the wayfarer: (thus is it) ordained by God, and God is full of knowledge and wisdom.” (At-Tawbah: 60)
Zakat forms a fundamental third pillar of Muslim faith. Zakat is a socio-economic act of worship (ibadah) that should be performed by every able Muslim. In this sense, Zakat is more than a personal ibadah; it is also an obligatory social institution; it plays a pivotal role in socio-economic well-being or affairs of the Muslim Ummah. History has shown that, though Zakat is not intended to be solely an economic tool, it has been functioning as an effective instrument in equitable income distribution and social service provider in the Muslim Ummah.
The fundamental principle of Zakat is that it is to be established in the fold of Muslim society in an organized manner and under the responsible supervision of the Government, or of a special Muslim supervisory body appointed by the Government. The practical functioning of the institution of Zakat must be kept in the highest level of integrity, courtesy, and loyalty to the Muslim society.
There are two types of Zakat:
1. Zakat al-fitr: a flat fee imposed on each individual Muslim person after completion of Ramadhan. Zakat al-fitr refers to the obligation of every Muslim for him/herself and dependents to contribute a certain amount of staple food or pay an equivalent monetary amount in the month of Ramadhan before Idd prayer.. 2. Zakat al-mal (tax on wealth): This is levied only on wealth that has reached a threshold called nisab. The nisab is calculated based on the condition of the wealth held for one year at the end of the year.
i.Zakat on Self-Assessment (Al-Fitr)
ii.Zakat on Income
iii.Zakat on Business
iv.Zakat on Savings
v.Zakat on Shares
vi. Zakat on Employees Provident Fund
vii.Zakat on Precious Items (Gold/Silver)
viii.Zakat on Wealth / Property
ix. Zakat on Agricultural
x. Zakat on Animals
xi. Zakat on Buried Treasure
1.The Wakf commission’s Counter.
2.Post (Cheque, Bank Draft, Money order).
3.Deducting from the salary.
5.Through an Islamic Bank.
1.Needy - those with income less than half of their needs.
2.Poor - those with income more than half of their needs, but still inadequate.
3.Amil - zakat’s administrator, including the cost of administration.
4.Muallaf - the non-Muslims who are persuaded to Islam and those who revert to Islam.
5.Al-Riqab - those who wanted to free themselves from slavery.
6.Al-Gharimin - help those in bondage and in debt.
7.Fisabilillah - activities done in the cause of Allah.
8.Ibnu Sabil - helping the wayfarer.