Zakat in Islam

Source: http://www.ukim.org/webpages/Zakah.aspx

"Take from their wealth a portion for charity, in order to clean them thereby, and sanctify them." Literal Meaning: Zakat or Zakah means grow (in goodness) or 'increase', 'purifying' or 'making pure'. So the act of giving zakat means purifying one's wealth to gain Allah's blessing to make it grow in goodness. One of the most important principles of Islam is that all things belong to God, and that wealth is therefore held by human beings in trust. The word zakat or Zakah means both 'purification' and 'growth'. Our possessions are purified by setting aside a proportion for those in need, and, like the pruning of plants, this cutting back balances and encourages new growth. Zakat or Zakah not only purifies the property of the contributor but also purifies his heart from selfishness and greed. It also purifies the heart of the recipient from envy and jealousy, from hatred and uneasiness and it fosters instead good-will and warm wishes for the contributors. A certain fixed proportion of the wealth and of the each and every kind of the property liable to Zakat of a Muslim to be paid yearly for the benefit of the poor in the Muslim community.The Zakat is a form of giving to those who are less fortunate. Zakat is a 2.5% levy on most valuables and savings held for a full year if their total value is more than a basic minimum known as nisab. Cash money in your bank and building society accounts, and the release value of bonds, securities and shares in any form are zakatable if they are purchased as an investment. There is no Zakat on family home or household furniture, carpets, car, etc. This is done before the beginning of the month of Muharram, the first of new year. Giving the Zakat is considered an act of worship because it is a form of offering thanks to God for the means of material well-being one has acquired. The payment of Zakat is obligatory (Fard) as it is one of the five pillars of Islam. Zakat is the major economic means for establishing social justice and leading the Muslim society to prosperity and security. [See Sahih Al-Bukhari, Vol. 2, Book ofZakat (24)]. The Qur'an says that only those who pay zakat are in the "brotherhood of faith". The Holy Qur'an also says that Zakat purifies assets and creates virtue ( Surah 9: 103 ). Distribution of Zakat: Zakat is distributed among 8 categories of people, namely: Fakir - One who has neither material possessions nor means of livelihood. Miskin - One with insufficient means of livelihood to meet basic needs. Amil - One who is appointed to collect zakat. Muallaf - One who converts to Islam. Riqab - One who wants to free himself from bondage or the shackles of slavery. (In Singapore, zakat due to this category of recipients is spent on those who need help to pursue education or to improve their standard of living). Gharmin - One who is in debt (money borrowed to meet basic, halal expenditure). Fisabillillah - One who struggles for the cause of Allah. Ibnus Sabil - One who is stranded in journey. The Holy Qur'an (Sura Al-Tauba: 60) classifies the due recipients of zakat under the following eight categories. "Zakat is for the poor, and for the needy and those who are employed to administer and collect it, and the new converts, and for those who are in bondage, and in debt and service of the cause of Allah, and for the wayfarers, a duty ordained by Allah, and Allah is the All-Knowing, the Wise". Calculate Zakat: Click here to calculate your zakat (Islamicity.com)