"And what you give in usury, so that it may increase through (other) people's wealth it does not increase with Allah, but what you give in Zakaat, seeking Allah's Pleasure, then it is those who shall gain reward manifold..." (30:39)
There are two main types of zakat :
- zakat on self (zakat fitr or fitrah);
- zakat on wealth (zakat mal),
Zakat on self is a per head payment eqv.to about US$1.30 per head (originally in terms of wheat or dates or rice of about 2.25 kilogram) paid during the month of Ramadhan by the head of a family for himself and his dependents to the zakat collector (amil).
Zakat on wealth comprises all the other types of zakat, such as on business, on savings, on income, on crops, on livestock, on gold, on minerals, on hidden treasures unearthed, etc. The payment of Zakât is obligatory on all Muslim. In current usage it is interpreted as a 2.5% levy on most valuables and savings held for a full year if their total value is more than a basic minimum known as nisab. At present nisab is $1,050 or an equivalent amount of any other currency.
Zakat is distributed among 8 asnaf (categories) of people, namely:
- Fakir - One who has neither material possessions nor means of livelihood.
- Miskin - One with insufficient means of livelihood to meet basic needs.
- Amil - One who is appointed to collect zakat.
- Muallaf - One who converts to Islam.
- Riqab - One who wants to free himself from bondage or the shackles of slavery.
- Gharmin - One who is in debt (money borrowed to meet basic, halal expenditure).
- Fisabillillah - One who fights for the cause of Allah.
- Ibnus Sabil - One who is stranded in journey.