- It reminds Muslims of the fact that whatever wealth they may possess is due to the blessings of Allah and as such it is to be spent according to the His commands.
- Zakat functions as a social security for all. Those who have enough money today pay for what they have. If they need money tomorrow they will get what is necessary to help them live decently.
- Zakat payer pays his dues to Allah as an act of worship, a token of submission and an acknowledgment of gratitude. The receiver of Zakat receives it as a grant from Allah out of His bounty, a favor for which he is thankful to Allah.
- He/she must possess wealth in excess of specified minimum (Nisaab) excluding his or her personal needs (clothing, household furniture, utensils, cars etc. are termed article of personal needs).
- It should be possessed for a complete lunar year.
Nisaab of cash, stock or bonds, other cash assets is the equivalent amount of Gold or Silver. Nisaab is calculated by adding up the cash value of all the assets such as gold, silver, currency etc. and if it is equal to or in excess of the minimum Nisaab as specified in the above table, the Zakat is due at the rate of 2.5%.
- Gold and silver, in any form.
- Cash, bank notes, stocks, bonds etc.
- Merchandise for business, equal to the value of Nisaab.
- Live stock.
- To calculate Zakat on jewelry etc. one must first determine the gold or silver content and then calculate the Zakat according to current market price.
- If the Gold possessed is less than 87.48 grams or if silver possessed is less then 612.36 grams, but the value of both combined is equal to or exceeds the Nisaab of either Gold or Silver, the Zakat will be due.
- In the event of an article not being of pure gold or pure silver, but containing a mixture of other metals and the gold or silver content is more than the other metal, it will be regarded as gold or silver and Zakat will be due. But in the case where other metal/s is of greater quantity than either gold or silver, Zakat will not be due on this article.
- Zakat should be given as soon as possible after it becomes due.
- All of the Zakat can be given to one person or to several persons.
- A poor man cannot be paid for his work from Zakat nor can Zakat be given in payment of services, except to the people appointed by the Islamic government to collect Zakat.
- Zakat will only be valid if the recipient is made the owner of that amount. If, for example, a few needy persons are fed a meal from Zakat money, then Zakat will not be fulfilled as they were not made owners of the food.
- Zakat cannot be given for the construction of Masjid, Madrasah, Hospital, a well, a bridge or any other public amenity.
- On any metals other than gold or silver.
- Fixtures and fittings of a shop, car, trucks or any delivery vehicle etc., which is used in running business.
- Diamonds, pearls, other precious or semi precious stones which are for personal use.
- There is no Zakat on personal residence, household furniture, pots and pan, personal clothing, whether they are in use or not.
- FUQARA: people who are poor and who possess more than their basic needs but do not possess wealth equal to Nisaab.
- MASAKEEN: people who are destitute and extremely needy to the extent they are forced to beg for their daily food rations.
- AL-AMILEEN: people appointed by an Islamic Government to collect Zakat.
- MU-ALLAFATUL-QULUB: persons who have recently accepted Islam and are in need of basic necessities who would benefit from encouragement by Muslims which would help strengthen their faith.
- AR-RIQAAB: slaves who are permitted to work for remuneration and have an agreement from their masters to purchase their freedom on payment of fixed amounts.
- AL-GHAARIMEEN: persons who have a debt and do not possess any other wealth or goods with which they could repay that which they owe. It is conditional that this debt was not created for any un-Islamic purpose.
- FI-SABILILLAH: persons who have to carry out an obligatory deed which has become obligatory on them and subsequently (due to loss of wealth) are unable to complete that obligation.
- Zakat cannot be given to parents and grandparents. In the same manner one's children and grandchildren cannot be given Zakat. A husband and wife cannot give Zakat to each other.