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Zakat is regarded as an act of worship and self-purification, which literally means, "that which purifies", and is the third pillar of Islam. It is a compulsory giving of wealth that every Muslim is obligated to pay when they have the above minimum, required amount of wealth (Nisab).
Some may think that Zakat is a form of tax, however, tax is a secular law and Zakat is a spiritual act of assisting the poor and an obligation as a caring person.
Zakat is calculated as 2.5% of each Muslims total annual savings during one lunar year.
Forms of wealth subject to Zakat:
Currency (either held in cash or in the bank)
Tradable assets owned by your business Crops
What happens if I don’t pay Zakat?
As mentioned in the Holy Quran, if Zakat is not paid it is not good for that person.