What Does Zakat Mean?
Zakat is the third pillar of Islam. It is a specified portion of a Muslim’s wealth that is given to those in need. It is the amount given once a year to support specific categories of people. The amount is about 2.5% of total wealth which includes the following asset classes:
- Gold and silver
- Precious metals
- Stocks and shares
- Real estate
- Agricultural livestock
These are the most common asset classes for which Zakat is paid from.
The linguistic meaning of zakat is “that which purifies.” It is considered to be a way for Muslims to purify their wealth and income. Similar to how the prayer (salah) purifies a person’s soul, zakat purifies your assets and earns you the pleasure of Allah because your wealth is distributed to those in need.