What is Zakat?
islamic financeDefinition
Zakat is the third pillar of Islam — an obligatory annual almsgiving of 2.5% of a Muslim's total accumulated zakatable wealth (savings, gold, business inventory) held above the Nisab threshold for one full lunar year (Hawl). It is a religious duty and a form of social welfare that purifies one's wealth.
Detailed Explanation
Zakat is not a voluntary charity — it is a mandatory religious obligation for every Muslim whose wealth exceeds the Nisab. The Quran mentions Zakat alongside Salah (prayer) 82 times, indicating its fundamental importance in Islam.
Zakatable assets include: cash and bank savings, gold and silver, business inventory (goods for sale), receivables (money owed to you that you expect to receive), and investment portfolio value. Non-zakatable assets include: your primary home, personal vehicle, clothing, household items, and equipment used for work.
Zakat recipients are defined in Surah At-Tawbah (9:60) as eight categories: the poor, the needy, Zakat administrators, those whose hearts are to be reconciled, to free captives/slaves, those in debt, in the cause of Allah, and the wayfarer.
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