Zakat plays an important role in Islam as it symbolizes “the third pillar of Islam”. Zakat in the literal sense means blessing, purity, and goodness. It is an estimated share of limited types of wealth imposed by God almighty to be distributed to entitled members of society as highlighted in the Holy Quran. Zakat is due in (gold, silver, money, cattle, sheep, and all kinds of food, such as dates and raisins).

Conditions

One’s Zakatable wealth rises to a minimum threshold (Nisab)
A lunar year (Hawl) passes while one’s zakatable wealth sustains the minimum threshold (Nisab).

Benefits

Implants the quality of giving in the Muslim.
Purifies the soul from Miserliness.
Eradicates begging and poverty.
Strengthens the relations between members of the Islamic community which leads to stability and thus development in all areas.

Beneficiaries of Zakat

The Holy Quran specifies the eight beneficiaries of Zakat in verse 60 of Surat At–Tobah:

“Zakat expenditures are only for the poor and for the needy and for those employed to collect [Zakat] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler – an obligation [imposed] by Allah. And Allah is Knowing and Wise.’’ [Qur’an 9:60]

Those living in absolute poverty (Al-Fuqarā’).
Those restrained because they cannot meet their basic needs (Al-Masākīn).
The Zakat collectors themselves (Al-Āmilīna ‘Alaihā).
Non-Muslims who are sympathetic to Islam or wish to convert to Islam (Al-Mu’allafatu Qulūbuhum).
People whom one is attempting to free from slavery bondage. Also includes paying ransom or blood money (Fir-Riqāb).
Those who have incurred overwhelming debts while attempting to satisfy their basic needs (Al-Ghārimīn).
Those working in God’s way (FīSabīlillāh).
Children of the street / Travellers (Ibnus-Sabīl).

It should be noted that the last 6 beneficiaries are limited to specialized institutions for Zakat but the first and second beneficiaries can be allocated Zakat on behalf of individuals. However, depending on the needs of the country, and subject to the Mufti’s guidance, Zakat can be extended to other projects which can benefit the community.