In Islam, Zakat is an obligatory charity that Muslims must pay every year. The word Zakat means to purify. So, in Islam, Zakat helps Muslims purify their wealth. Since Zakat is a religious ritual, Muslims are required as a matter of faith to learn it and perform it correctly. This means, a Muslim must assess Zakat accurately upon his or her own different types of wealth and ensure its proper distribution at its due times to specified beneficiaries, with or without a supervising authority.
But, are there different types of Zakat? The answer is YES.
There are two types of Zakat that Muslims are obligated to pay: Zakat Al-Mal, or Zakat on Wealth, and Zakat Al-Fitr, the Zakat of Fast-Breaking, for the completion of the fasting month of Ramadan.
What is Zakat Al-Mal?
Zakat Al-Mal is commonly referred to as “Zakat” by most Muslims. It is Zakat that Muslims are required to pay annually on wealth that includes: currency, gold, silver, and property. It considers your comprehensive net assets (total wealth). The amount of Zakat Al-Mal that each Muslim owes will vary because it is 2.5% of net wealth that a person holds for a year. Zakat al Mal is only required once a Muslim reaches a certain financial threshold known as nisab. If a Muslim doesn’t reach this threshold, Zakat Al-Mal isn’t required on him or her.