What is the real significance of Zakāt? We should know that the word ‘Zakāt ‘ comes from the Arabic language and is a noun from the root ‘Z’, ‘K ‘ and ‘W ‘ which means that a certain thing has become available in abundance. When this is used in relation with Allah, it would mean that God has caused someone to grow and develop in a perfect manner. Another meaning is that God has caused him to be purified. ‘AI-Zakāt’ also means a thing of the highest quality; or perfect obedience to Allah. There is another meaning also, i.e. a certain portion levied on someone’s possessions so that the remaining part becomes blessed with purity.
Another lexicographer explains that these alms are called ‘Zakāt’ for the reason that the wealth and riches from which this portion has been taken becomes blessed and is bound to turn plenteous and definitely makes it immune from loss and depreciations.
We, therefore, come to understand that Zakāt, in fact, is the means of increasing, cleansing and purifying; of growth and of blessings and of ensuring protection from poverty and all sorts of embarrassments and of submission and obedience to Allah. It is the peculiarity of the Arabic language that its words hold within themselves the meanings and their beauty and philosophy. We could say that the entire philosophy and usefulness of Zakāt is contained in the word itself and we know that it is the means of cleansing and purifying one’s possessions and one’s soul as well; Zakāt makes one flourish and prosper. One also gains the pleasure of Allah through it. It ensures personal progress and material welfare.
According to the law of Islam one has to pay 2.5% of one’s cash money, capital, stock and tradeable assets, including jewelry in gold and silver of which one was in possession for one full year, provided that one had more than the assessable limit. This is paid to help the poor and the needy, as has been commanded by the Holy Quran and explained and put into practice by the Holy Prophet himself, peace and blessings of Allah be upon him.
It must be remembered that Zakāt is not an income tax which is levied on one’s income. But it is levied on one’s savings and is spent wholly for the benefit of the poor and the needy. Islam has imposed Zakāt on wealth and properties which have the attribute of increasing and multiplying and which could also be preserved safely, for which reason it is assessed every year during which one has had ample chances of spending. It is on this principle that gold, silver, cash in any shape or form, business stock, goats, sheep and cattle which feed themselves by grazing and all the produce from the land are assessable for Zakāt. But no Zakāt is to be paid on land, houses for personal residence, and other goods in daily use. Fruit and vegetables are not assessable.
A proper scale for assessment has been fixed, as for instance 620 grams of silver and 87 grams of gold are liable for assessment. Stock-in-trade and houses that are rented and bring income are assessable after every twelve months. This is Zakāt and is collected for the poor and the needy. (See Appendix.)
Jewelry in the form of gold and silver in one’s use or which is loaned for use to poor friends is not assessable. It is preferable that the rich people should pay Zakāt on their jewelry in their own use but which is not loaned to the poor at all. It brings merit if paid, though it is not compulsory. But the jewelry of gold and silver which is not in use is definitely taxable. Zakāt has to be paid on this every year so long as it falls above the minimum level of assessment as specified above.
It is evident from the Holy Quran that Zakāt was being paid from the time when the Command for this had been revealed. We read in the Chapter Al-Muzammil:
‘…and observe Prayer, and pay the Zakāt, and lend to Allah a goodly Loan. And whatever good you send on before you for your souls, you will find it with Allah. It will be better and greater in reward …’ (73:21)