Islam enjoins two kinds of obligations on man: obligations due to Allah, and obligations due to fellow-men. Salat (the Prescribed Prayer) prepares man to fulfill obligations to Allah, and Zakat instills in him a deep consciousness and urge to fulfill his obligations to fellow-men. Islam indeed consists in fulfilling these two kinds of obligations as faithfully and sincerely as possible.

What is Zakat?

Literally, Zakat means to purify, to develop and cause to grow, but as Shariah terms it is an act of monetary worship according to which every well to do Muslim who possesses equal to or exceeding a laid down minimum, has to give away, at the prescribed rate, a portion of it to the deserving poor and needy people. The payment of Zakat purifies and cleanses the remaining wealth, which is blessed by Allah in this world and made to grow manifold in terms of reward for the prayer in the Hereafter. That is why this monetary worship has been termed Zakat as it purifies one's wealth and causes it to grow in the Next World.

Merit and Significance of Zakat

Zakat it the third important pillar of Islam and is placed just after Salat in the order of merit. The Quran has mentioned them in the same sequence after Iman (Affirmation of Faith) and the Traditions of the Holy Prophet also confirm the same. According to Hadrat Abdullah ibn Abbas, when the Holy Prophet dispatched Hadrat Mu'adh ibn Jabal to Yaman as governor, he instructed him thus:
"You are going to a people who were given a Divine Book. You should first of all invite them to the creed of Islam: 'There is no god but Allah, and Muhammad is Apostle of Allah'. When they have affirmed this, tell them that Allah has enjoined on them to offer Prayers five times a day; when they have affirmed this too, tell them that Allah has prescribed for them charity (Zakat), which will be collected from their rich people and distributed among needy and indigent people;  when they have affirmed this too, you will take care not to extract from them their choicest things in Zakat; and guard yourself against the curse of the oppressed, for there is no curtain between the oppressed and his God." (Bukhari, Muslim)

When a Believer gives away a portion of his choice wealth willingly in the way of Allah only to win His approval, he experiences a pleasant purification of the heart, which in the process is rid of the worldly loves and greed and filled instead with freshness, grace and purity of Divine love. To discharge Zakat dues promptly is indeed a proof of one's love of Allah and also an effective and authentic means of its cultivation and growth.

Zakat should not be considered merely as a device of ameliorating the of the poor and disturbing the wealth equitably, but it is an important form of worship prescribed by Allah, which is necessary for cleansing one's heart and soul and developing one as a sincere, righteous and grateful servant of the Lord. Legally, Zakat is deemed to have been discharge when a well-to-do person taken out for distribution among the poor a portion of his wealth according to the prescribed rate, when a full year has passed over the wealth. But Zakat is not simply that. It is a Divinely prescribed way of cleansing one's heart of all kinds of worldly greed and material loves and inculcating love of Allah and preparing one to expend all one's physical and mental capabilities in the way of Allah for the sake of one's spiritual development and satisfaction. That is why Shariah has prescribed an exemption limit and enjoined the Muslims to give away a portion of their property for the deserving poor, but has at the same time exhorted that they should not remain content with expending the bare minimum, but should cultivate the habit of spending money, over and above that, in the way of Allah. The practice of the Holy Prophet and his companions fully confirms this.

According to Hadrat Anas, a man came before the Holy Prophet and begged to be given something. At that time the Holy Prophet possessed a large flock of goats which filled a whole valley between the two hills. He gave away the entire flock to the beggar. When the man came back to his tribe, he said:
"O People! Embrace Islam, for Muhammad gives away everything he has without the least fear of becoming penniless himself." (Kashf al-Mahjub)

Once a needy person came to the door of Imam Husain and said: "O son of the Prophet! I need 400 dirhams". The Imam got 400 dirhams from his house and giving them to the person, started weeping. When the people asked why he wept, he replied:
"I weep because I should have given him the amount even before he had to beg for it. I should not have given him the trouble to come before me and beg for it." (Kashf al-Mahjub)

Hadrat Aisha says, "Once a goat was slaughtered in the house. When the Holy Prophet came, he asked: 'Is any of the meat left in the house?' I said, 'Nothing except a fore-log'! The Holy Prophet remarked: 'Nay! Allah except the fore-leg (because that alone will be of any worth in the Hereafter)." (Tirmizi). Hadrat Asma, daughter of Abu Bakr, says that the Holy Prophet advised her, saying:
"Spend freely and generously in the way of Allah and do not count and calculate what you have to give away. If you do that, Allah also will give you likewise; and do not withhold your wealth unnecessarily, otherwise Allah will treat you likewise, and will not bestow on you without measure." (Bukhari, Muslim)

Hadrat Abu Hurairah reports that the Holy Prophet said:
"Allah speaks to every human being to the effect: 'Son of Adam! Spend freely in My way: I shall bestow freely on you (from My infinite treasure)." (Bukhari, Muslim)

Hadrat Abu Zarr says:
"One day I went before the Holy Prophet at a time when he was resting in the shade of the Kabah. On seeing me, he said: 'By the God of Kabah! those people are certainly in grave loss!' I asked, 'May my father and mother be sacrifice for you, who are those in grave loss?' He replied 'The well-to-do people, but not those who expend their wealth in front of them and behind them, to the right of them and to the left of them, in the way of Allah, though such people are indeed very few in number." (Bukhari, Muslim)

Importance and Excellence of Zakat

The utmost importance of Zakat in Islam is borne out by the fact that the Quran has mentioned Salat and Zakat together at about 32 places as two of the foremost duties of the Muslims after the affirmation of Faith. Thus, a person who carries out these two duties duly can be regarded as having fulfilled all his religious obligations. A person who presents his body and soul in the spirit of complete obdience before his God inside the mosque, cannot be expected to ignore the rights and of God outside the mosque. Similarly the person who experiences satisfaction of the heart in the benevolent act of giving away a portion of his choice wealth in the way of Allah only to win His approval, cannot be expected to ignore and violate the rights of his fellowmen in the least. That is why the Quran has presented Islam as a combination of Salat and Zakat and a testimony of one's real faith in Islam. In Surah At-Taubah, Allah, after expressing His displeasure with the idolaters, tells the Muslims that if they repent of their idolatrous creed and establish Salat and pay Zakat, they should be regarded as brethen in faith and should be accorded the same status in the society as the other Muslims enjoy:

    "...if they repent even now, and establish Salat and pay Zakat dues, then they shall be your brethren in faith." (9:11)       

Thus, according to this verse, Salat and Zakat are the main features of Islam and a clear testimony of one's faith in it; the refusal to pay Zakat dues is a characteristic of the idolatrous people, who do not believe in the Hereafter and are wholly devoid of faith.

When some tribes during the caliphate of Hadrat Abu Bakr refused to pay their Zakat, he regarded this as an act of apostasy and declared:
"If these people withhold even a kid from the Zakat dues that they used to pay in the time of the Holy Prophet, I shall wage war against them."

Hadrat Umer differed with the Caliph, and said:
"How can you wage war against them when they profess faith in the Kalimah? Has not the Holy Prophet specified: 'The life and property of the one who pronounce La ilaha ill-Allah stands secured?"

To this the Caliph retorted firmly:
"By God! I shall certainly wage war against the people who discriminate between Salat and Zakat." (Bukhari, Muslim)

Thus, Salat and Zakat are two inseparable articles of the Islamic faith. Rejecting them or discriminating between them amounts to rejecting the Divine Creed, and the Believer has been enjoined to declare war on the apostates. Hadrat Abdullah ibn Masud says:
"We have been commanded to observe Salat and pay Zakat. The Salat of the person who does not pay Zakat, has no value whatever." (Tabarani)

According to the Quran, the people who are neglecting of their Zakat, stand deprived of Divine guidance:
"(The Quran) is guidance of God-fearing people, who believe in the unseen, establish Sakat and expend (in Our way) out of what We have bestowed on them." (2:2-3)

The true Muslims are those who pay their Zakat dues regularly:
"True believer are only those...who establish Salat and spend in Our way out of what We have given them." (8:3-4)

The Holy Prophet has said:
"The generous one is close to his God, close to Paradise, and close to the people and away from Hell, whereas the miserly one is away form God, away from Paradise and away from the people but certainly close to the Hell. The fact is that an ignorant person is better liked by Allah and than a devout but miserly person." (Tirmizi)

Aims of the Institution of Zakat

The institution of Zakat aims to root out the love and greed of the world from the Believer's heart and to inculcate in it the pure love of Allah. This happens when the Believer does not rest content with the payment of Zakat dues only but it is imbued with the spirit and attitude that all his possessions actually belong to Allah, and he has to expend these in His way in order to win His approval. Without such a spirit nobody can ever have the feelings of love and sympathy for his fellow-men merely for the sake of Allah, nor can one be sensitive and generous to recognize the rights of Allah and fulfill them as faithfully as one should. The institution of Zakat is a means of cleansing the Muslim society of stinginess, parsimony, malice, jealousy, hard-heartedness and exploitation of others and of inculcating and developing pure and noble feeling of love, sacrifice, goodness, sincerity, well-wishing cooperation and companionship. That is precisely why Zakat had been enjoined as an imperative duty on the community of every Prophet, though its rate and other conditions and legal injunctions have been different for different communities.

Zakat in the Former Communities

According to the Quran, Zakat, just like Salat, had been prescribed for the communities of all the former Prophets. In Surah Al-Anbiya, after relating the incident about prophets Moses and Aaron, the Quran has reproduced in detail the thought-provoking dialogue that took place between Prophet Abraham and his people. Then after mentioning Prophets Lot, Isaac and Jacob (peace be upon them all) in the same context, it says:
"And we made them leaders who guided (the people) by Our Commands, and We instructed them by revelation to do good deeds, establish Salat and pay Zakat, and they were worshippers of Us (alone)." (21:73)

The Quran has mentioned Allah's covenant with the Jews at several places. Here is one of its important articles:
"Remember the We made a solemn covenant with the Children of Israel to the effect: 'Worship (and submit to) none save Allah: be good to your parents, to your relatives, to the orphans and to the helpless: speak aright with the people: establish Salat and pay Zakat." (2:83)

At another place, it says:
"Allah had bound the Israelites by a solemn covenant, and appointed twelve supervisors from among them and said: 'I am with you: if you establish Salat and pay Zakat and believe in My Messengers, and support them and give a generous loan to Allah, I shall surely wipe out your evils from you, and admit  you into gardens  under which canals flow." (5:12)

In Surah Maryam, Allah says about Prophet Ismael:
"And Ismael enjoined on the people of his house Salat and Zakat, and he was one with whom his Lord was fully pleased." (19:55)

Again in Surah Maryam, Prophet Jesus while introducing himself as a Prophet of Allah, has stated the following as the primary aim of his mission:
"And Allah has enjoined on me Salat and Zakat so long as I live." (19:31)

Exhortation and Command to pay Zakat

In view of the extraordinary importance and urgency of Zakat, the Quran has mentioned it repeatedly and enjoined it as an essential duty along with Salat. Both the Quran and the Sunnah have recounted its great spiritual and temporal benefits and exhorted the believers to practice it regularly. For instance, the Quran says:
"The Charity of those who expend their wealth in the way of Allah may be likened to a grain of corn, which produces seven ears and each ear yields a hundred grains. Likewise Allah develops manifold the charity of anyone He pleases, for He is All-Embracing, All-Wise." (2:216)

The sower sows seeds of corn with great hopes from God and prays to Him for rain; his Lord then multiplies his grains a hundredfold and fills his granary with corn. This parable is meant to make man realize that whatever he expends willingly in Allah's was for the sake of His approval, is developed manifold and rewarded  most generously. Allah being Generous to His creatures and All-Knowing only sees the motive of sincerity and devotion of His servant and rewards him beyond measure not only in the Hereafter but blesses the righteous society with happiness, prosperity and progress in this world as well:
"The interest that you give in order to cause an increase in the people's  property, does not increase it in the sight of Allah, but the Zakat that you give in order to win Allah's pleasure, causes the real increase in the people's property." (30:39)

As a matter of fact, Zakat and other charities are discharge promptly by those people alone who are noble, large-hearted, generous by mature and well-wishers of fellow-men. Zakat and charity, in fact, are a means of developing and nourishing such qualities of the heart. Real prosperity, peace of mind, happiness and progress in the world can be enjoined by the society only whose members possess such noble traits of character. The national wealth should not remain confined to a few selfish, hard-hearted, miserly individuals, but should be allowed to circulate in the society so that every person gets an equal opportunity to earn and expend wealth freely as he pleases. 

According to Hadrat Abu Hurairah, the Holy Prophet said:
"A date given in charity by a person out of his law-fully earned wealth, is developed and looked after by Allah just as people look after their children, till it grow as huge as a mountain." (Bukhari)

Again, according to Hadrat Abu Hurairah, the Holy Prophet said:
"Giving away something in charity does not cause any decrease in a person's wealth, but increases it instead. The person who adopts humility for the sake of Allah is exalted in ranks by Him." (Muslim)

According to the Quran, only those people pay their Zakat dues willingly and regularly, who intend to purify their hearts, to do good, to be blessed with Divine wisdom and mercy, and to win Allah's forgiveness, eternal peace of mind and bliss. It says:
"O Prophet, accept propitiatory offerings from their possessions to cleanse and purify thereby." (9:103)
"Satan holds out to you the threat of poverty and prompts you to adopt a shameless niggardly conduct, but Allah holds out from Himself the promise of pardon and bounty: Allah is All-Embracing, All-Knowing. He bestows wisdom upon anyone He wills, and he who is given wisdom is in fact given great wealth." (2:268-269)
"...there are some, who believes in Allah and the Last Day and regard what they expend in the Way as a means of bringing themselves nearer to Allah and of seeking the Messenger's prayers for Allah's blessings: yes, this is indeed means of bringing them nearer to Allah, and Allah will certainly admit them to His blessings; indeed Allah is Forgiving and Compassionate." (9:99)
"And only such a none will be kept away from the fire of Hell who fears Allah the most and who gives to others out of his wealth with a view to cleanse his heart (of the worldly love and greed)." (92:17-18)

Hadrat Adi bin Hatim says that he heard the Holy Prophet say:
"O people! Protect yourselves from the fire of Hell even if by giving away a piece of a dried date." (Bukhari)

According to Hadrat Abu Hurrairah, the Holy Prophet said:
"On the Day of Rising, when there will be no shade except under the Divine Throne, seven categories of people will be given shelter there under. One of them will be the person who expends his wealth secretly in the way of Allah so that his left hand is not aware of what his right hand is giving." (Bukhari)

Whenever a person brought his charity before the Holy Prophet, he would express great joy and would pray for Allah's mercy for him. When Hadrat Abu Aufa came with his charity, the Holy Prophet prayed:
"O Allah! Send down Thy mercy upon the household of Abi Aufa." (Bukhari)

Once the Holy Prophet retired to his house soon after the Asr Prayer and came out after a while. When the Companions asked what was the matter, he said:
"There was a piece of gold lying in the house; I did not like that a night should pass over it; I have therefore given it away to the needy." (Bukhari)

Hadrat Anas says that the Holy Prophet once said:
"Charity cools the wrath of Allah and the giver is safeguarded against a disgraceful death."

Obviously, there cannot be a greater desire of a believer than of remaining immune from Allah's wrath and dying a noble death.

Thus, it is absolutely imperative that a Muslim who possesses property in excess of a minimum exemption limit, called Nisab, for a whole year, should pay Zakat on it. The one who denies the imperative status of Zakat falls outside the pale of Islam, and the one who acknowledges its status but does not pay it regularly becomes a sinner.