The word " Zakat " is used in two senses :-1. GROWTH OR INCREASE EXPLANATION :-
It means the persons who pays Zakat regularly, Allah increases his wealth and dignity. Some people we think that when a person Gives Zakat, his wealth decreases but God says that by giving Zakat wealth increases.
2. PURIFICATION :-
God says that wealth is impure unless Zakat is deducted from the wealth. So Zakat purifies the wealth. So in other words it is the purification of soul character, life and wealth.
Zakat is paid by the Sahib-e-Nisab ( wealthy people ) to the poor and needy people.
IMPORTANCE OF ZAKAT
1. Compulsory :-
Zakat is compulsory on the wealth of Muslims.
2. Purification of Soul :-
Zakat purifies the soul and character of the Zakat payer. It makes him humble and God fearing.
3. Purification of Wealth :-
It purifies the wealth, otherwise it is impure.
4. Solution for Unequal Distribution of Wealth :-
Islam is against the concentration of wealth in a few hands. In a capitalism all the profit goes in the pockets of few persons and society is divided into two classes rich and poor. In Islamic system Zakat goes from rich to poor and it removes the unequal distribution of wealth.
5. Solution for Unemployment :-
Zakat is very useful in removing the unemployment. If the Zakat is given to the poor, it will increase their effective demand so producer will increase the production and will employ more labourers.
6. Creates Love in Human beings :-
When the rich people give Zakat to poor, they begin to love each other. So it creates the sense of brotherhood.
7. Solution for Depression :-
If the people hold the money in the shape of cash or gold, they will have to pay Zakat, so people prefer to do the business instead of hoarding. The rate of investment, production and employment will increase.
8. Elimination of Poverty :-
When the wealth goes from rich to poor it removes the poverty in the country. Poor and needy people get the money according to their requirements.
9. Treasury of Islam :-
Holy Prophet (Peace be upon him) called Zakat the treasury of Islam. Poor and needy people get the money according to the requirements.
10. Insurance Company of Muslims :-
It is a very simple principle, today you are rich you should pay Zakat to the poor and needy people of the society. If at any time you feel any financial problem the other members of the society who will be "Sahib-e-Nisab" they will help you. So after paying Zakat you have insured yourself and you are free from every fear. You have also opened an account in the Book of Allah and he will also repay you more than this to the next world.
11. Reduction in Crimes :-
Various crimes like theft and robbery are caused due to poverty , consequently there will be reduction in crimes.
12. Wide Circulation of Wealth :-
When wealth goes from rich to poor, the poor propensity to consume will rise and producer will produce more commodities to meet the demand. In this way circulation of wealth will increase and depression will never occur in the economy.