Zakat

The primary purpose of Zakat is to maintain social welfare, economic balance, and justice by assisting the poor and the needy. It's meant to purify the wealth of the giver by redistributing wealth in society.

The common rate is 2.5% of a Muslim’s total savings and wealth above a minimum amount known as nisab, but it can vary depending on the type of wealth (for example, agricultural produce, livestock, business assets, gold, and silver).

The nisab is the minimum amount of wealth a Muslim must possess before they become liable to pay zakat. It is equivalent to the value of 85 grams of gold or 595 grams of silver.

Recipients: The Quran specifies eight categories of people who are eligible to receive Zakat (Surah At-Tawbah, 9:60). They include the poor, the needy, those employed to collect Zakat, those whose hearts are to be reconciled, captives, debtors, those in the cause of Allah, and the wayfarer.

Timing: Zakat is due after one lunar (Hijri) year has passed and is calculated on various assets, including cash savings, precious metals, trade goods, and livestock.

Impact on Society: Zakat acts as a social security system for the Muslim community, aiming to eliminate poverty and inequality.

Difference from Sadaqah: While Zakat is obligatory, Sadaqah is voluntary charity given above and beyond what is required from the obligation of Zakat.