Zakat as translated from Arabic means growth, multiplicity, fertility, cleansing, full of baraqah.

Zakat is the third pillar of Islam and is an ibadah in terms of wealth. A person’s iman is incomplete unless he has performed all the pillars of Islam and a person should not place less importance on any of the pillars.

Performing zakat is to distribute a particular portion of one's wealth on which Allah has made obligatory among the entitled as prescribed in the Quran.

For the individual, Zakat:

• Purifies and promotes assets;
• Develops gratitude for Allah's bounty;
• Brings about a sense of peace and well-being.
• For the society, Zakat:
• Minimizes the feeling of envy among those who are less well-to-do;
• Provides a religiously-approved method of managing the society's economy and finance;
• Makes it possible for part of the wealth of the rich to be distributed among the poor.

The following four conditions make Zakat compulsory:

• Being a Muslim
• Has full ownership of assets.
• Nisab (minimum zakatable amount) is reached. (i.e. the approximate market value of 86 grams of gold)
• Haul is completed – i.e. having possession of the assets for a complete Hijrah year. (1 Hijrah year = 354.5 days)

Philosophy of Zakat

• Brings about protection of property from encroachment and grudge

• A means to aid the poor and those in need
• Cleanses one's heart from frugality and parsimony
• Gives support and dignity to needy Muslims
• A means of expressing gratitude to Allah for all His bounties

Zakat is 2.5% of all zakatable wealth that has been in your possession for a lunar year. If your wealth amounts to less than a threshold figure, termed the nisab, then no zakat is payable. This threshold limit is 87.48g (3oz) of gold, or its equivalent in cash.