Definition:

Zakah or alms tax can be defined as that portion of a man''s wealth which is designated for the poor. The term is derived from the Arabic verbal root meaning "to increase." "to purify," and "to bless." It find its origin in Allah''s command to: "Take sadaqah (charity) from their property in order to purify and sanctify them" [at-Taubah 103]. That is why this kind of sadaqah is called zakah, for by paying it, one is aspiring to attain blessing, purification, and the cultivation of good deeds.

From Quran;

Allah the mighty the majestic mentioned Zakah, more than 80 times along with establishing salaath in the Holy quran. For the brevity few are below

At-Taubah 103 authorizes the Prophet, upon whom be peace, to take either a stipulated amount of alms from the believers'' holdings in the form of the obligatory zakah, or a voluntary, unstipulated amount (zakah of tatawwul). In this ''ayah, "purify" means to purify them from stinginess, greed, and meanness, and a lack of remorse toward the poor and the wretched. To sanctify them is to raise them in esteem through good deeds and blessings so that they will be worthy of happiness both now and in the afterlife.

Allah further confirms: "And the believers, men and women, are protecting friends of one another; they enjoin the right and forbid the wrong, they perform prayer and pay the zakah, and they obey Allah and His Messenger. Upon them, Allah will have mercy" [at-Taubah 71].

From Ahadeeth;

At-Tirmizhi relates from Abu Kabshah alAnmari that the Prophet, upon whom be peace, said: "I swear upon three (things) and ask you to memorize my words: Sadaqah taken from a property never decreases it; a man who suffers injustice and is patient with it, Allah will grant him strength; a man who starts begging, Allah will cause him to be poor."

It was reported from ''Aishah that the Messenger of Allah, upon whom be peace, said: "I swear upon three things: Allah does not equate one who has a portion in Islam with one who does not. The portions of Islam are three: prayer, fasting, and zakah. If Allah takes care of a man in this world, He will take care of him on the Day of Judgment. If a man likes a group of people, Allah will certainly include him among them. As for the fourth, if I swear on it, I hope I will not commit a sin: that if Allah conceals a man''s sin in this world, He will certainly not expose him on the Day of Judgment."

The Niyyah (Intention)

Since the payment of zakah is an act of worship, its validity depends upon the expression of one''s intention. That is, the zakah payer should pay it for the sake of Allah; he should make up his mind, with all of his heart, that zakah is an obligation to be discharged. Allah says: "And they are commanded no more than this: to worship Allah, sincere in their faith in Him alone" [al-Bayyinah 5].

It is related in al-Bukhari and Muslim that the Prophet, upon whom be peace, said: "The value of [one''s] deeds is determined by [one''s] intentions; and thus for each shall be according to his intentions." Malik and ash-Shaf''i say that the intention is to be made at the time of rendering zakah. Abu Hanifah holds that the intention must be present at the time of payment or when zakah is being set aside from one''s assets. Ahmad''s view is that it is permissible to express the niyyah a little earlier before payment.

Who is obliged to Pay Zakah

Zakah must be paid by every Muslim who has a nisab, which is the minimum of one''s holdings liable to zakah. The nisab is conditioned by the following:

-1- Zakah should be paid on any amount of money remaining after meeting the expenses for such necessities as food, clothes, housing, vehicles and craft machines.

-2- A complete year of Islamic calendar should pass, starting from the very day of the nisab''s possession, without any decrease during the year. In case of its decrease (being less than nisab), the year count (hawl;) starts from the day of the nisab completion.

Commenting on the issue, an-Nawawi said: "In our view and the views of Malik, Ahmad, and the majority of scholars, the amount of property liable for payment of zakah, such as gold, silver, or cattle, is tied to the completion of nisab through the turn of a whole year. If the nisab decreases in any time of the year, [the counting of] the year discontinues. Later, if the nisab is completed, the year count is resumed from the time of its completion."

On the same subject, Abu Hanifah holds: "What matters isthe availability of nisab at the beginning and end of the year. Its decrease at any time in between does not matter, even though the zakah payer had two hundred dirhams and he lost all but one dirham during the year, or if he had forty sheep, all of which died except for one during the year. If, at the end of the year, he had two hundred dirhams, or forty sheep, then he must pay zakah on all of that. This condition is not applicable to the zakah of plantations and fruits, for their zakah should be paid on the harvest day. Allah, the Exalted One, says: ''And pay the due thereof upon the harvest day'' [alA''raf 142]."

Al-''Abdari elaborated that: "The holdings subject to zakah are of two kinds. The first kind grows by itself: crops and fruits. The second kind is used for growing and production: money, merchandise, and cattle. In the former case, zakah should be paid at the time of harvest. In the latter case, it should be paid at the end of the haul. This was the opinion of all jurists as reported in anNawawi''s al-Majrnu''."

This tells us that on the shares/stocks when you sell on profit, pay it’s zakah right way. ~aj

Payment of Zakah in Due Time

Zakah must be paid immediately at its due time. Deferring payment of zakah is prohibited, unless the payer for some valid reason cannot pay it on time. In such a case, he may wait until he is able to pay it. It is related by Ahmad and al-Bukhari that ''Uqbah ibn al-Harith said: "Once I performed the ''asr prayer with the Prophet, upon whom be peace. When he concluded the prayer, he hurriedly went to his house and retumed immediately. Noticing the amazed faces, he said: ''I left at home a piece of gold which was meant for sadaqah, and I did not want to let it remain a night in my house, so I ordered it to be distributed.''"

Ash-Shaf''i and al-Bukhari (the latter in his Tarikh) relate from ''Aishah that the Prophet, upon whom be peace, said: "Whenever sadaqah which is payable is mixed with a property, it will destroy that property." The same hadith is related by al-Humaydi with this addition: "If you have to pay sadaqah which is payable, then it must be set aside, or the unlawful [property] will destroy the lawful one."

The consequence of not paying Zakah is mentioned many places in the Quran, please ref: at-Taubah 34-35, al-''Imran 180 and from Hadith: Ahmad, al-Bukhari, and Muslim relate from Abu Hurairah that the Messenger of Allah, upon whom be peace, said: "No owner of a treasure who does not pay zakah will be spared, for his treasure will be heated in the Fires of Hell and then made into plates. His flanks and his forehead will be branded with them until Allah pronounces judgment on His servants during a day lasting fifty thousand years.

Taken from Fiqhu –Ssunnah of [well known scholar ] Sayyed Sabiq.

The Recipients of Zakah :

There are eight categories of the beneficiaries of zakah which Allah specifies in the Qur''an: "The alms are only for the poor and the needy, for those who collect them, for those whose hearts are to be reconciled, for the freedom of those who are captives and in debt, for the cause of Allah, and for the wayfarers; [it is] a duty imposed by Allah. Allah is the Knower, the Wise" [at-Taubah 60].

1-Poors (Fuaqara):

The Quranic term (Fuqara) applies to those who depend for their subsistence on others. Zakah aims at supporting the poor by satisfying their needs. A specified amount is therefore given to them on a continuous basis to alleviate their state of poverty.

2-Needy (Miskeen):

Abu Hurairah (R.A.) reported that the Messenger of Allah, upon whom be peace, said: "The needy person (miskin) is not one who goes around asking the people for a date or two, or for a mouthful or two, but the one who is too embarrassed to ask. Read if you wish: ''They do not beg from men importunately'' [alBaqarah 273]."

3-The Zakah Employees (Aameleen):

Muslims who are employed to collect Zakah, either through persuasion or force can also qualify as its recipients. Their support and their undertaking to help the government/Zakah institution is the lesser of two evils and a preferable arrangement.

4-Reconcilation of Hearts (Moallafati Quloobohum):

This applies primarily to that group of people whose hearts, due to their weak faith, need to be reconciled or strengthened for Islam. In this case, Zakah is distributed to rid Muslims of their evil, or to procure their assistance in the defense of Muslims.

5-For those in Bondage (wa fi ar-riqab):

This category includes two kinds of slaves: contracted slaves and regular slaves. Both categories were aided with sadaqah to obtain their freedom.

6-In Debt (Gharimin):

People burdened by debts and unable to pay them are of several kinds: those who took upon themselves responsibility to discharge a debt; those who guaranteed debts of others and therefore, upon default, the debts have become their obligation; those who mismanaged their finances, those who borrowed money because they had to; or those who were involved in sinful acts and then repented, and who had to pay a fine for repentance. All of them may take sadaqah to meet their debts.

7- For the cause of Allah (Fi Sabilillah):

Fi Sabilillah means for the sake of Allah that is, to attain Allah''s pleasure. Part of Zakah designated for the cause of Allah is given to volunteer fighters, especially those who are not on the payroll of the state, regardless of their financial status. The students/Scholars engaged to learn and spread up the teachings and practices of Islam may also be helped through Zakah fund if they are unable to arrange their source of income. Similarly the welfare projects designed to benefit the community in large with intention to attain Allah’s Pleasure may be funded through Zakah amount.

8- For the Way Farer (Ibne Sabil):

A traveler stranded in a foreign land should be given Zakah if he lacks the means to achieve his objectives. Zakah is not to be given to the person if he can find someone to lend him the money he needs and if he has enough of his own money in his country to pay his debt.

Zakah cannot be normally given to :

1. Non- Muslims. Zakah is just not a charity but accomplish with faith and intention to offer a prayer instead of mere charity. Since non Muslims are not comprised with the true faith they are out of this context.

2. Relatives like father, mother, children (minor child) paternal and maternal grand parents, etc. and offspring.

3. To Sayeds. They are the descendants of the holy Prophet, upon whom be peace and Zakah is nothing but filth that comes out from people''s properties so it is not suitable for descendants of the holy Prophet, upon whom be peace.

4. Zakah is a religious charity and must not be used to clear any commercial liability of Zakah Payer nor it should be used to benefit the Zakah payer in terms of socio-economic or political edges.

Tradition of Zakah Collection and Distribution:

Though the practice of Zakah was observed even before Hijrat, it has been lawfully imposed and implemented in the ninth Hijra year. During his period, the Messenger of Allah (peace be upon him) used to send his authorized agents to collect Zakah. He would then distribute it among the deserving people. Abu Bakr and '' Umar (R. A.) did the same. As-Sa''ib ibn Yazid reported: "I once heard the Messenger of Allah, upon whom be peace. He said: ''This is the month of your Zakah. If any one of you still owes a debt, let him pay it off so that your properties become free from debts. Then, you can pay the Zakah on them.'' " Al-Baihaqi relates it with a sahih chain.

Before seventh Hijra century the administration of Zakah funds were managed through Baitulmal under Islamic Governance. But after seventh Hijra century, with fall of Islamic Governance and Leadership, the practice of Baitulmal was not observed in the Muslim community. In absence of Baitulmal the intellectuals of that period granted permission to distribute Zakah at personal levels which has been misunderstood as command by the followers.