The third obligation is Zakat. Every Muslim, whose financial conditions are above a certain specified minimum, must pay annually 21/2% of his cash balance to a deserving fellow being, a new convert to Islam, a traveler, or one involved in debts. This is the minimum. The more you pay the greater the reward that Allah shall bestow on you.
The money that we pay as Zakat is not something Allah needs or receives. He is above any want and desire. He, in His benign Mercy, promises us rewards manifold if we help our brethren. But there in one basic condition for being thus rewarded. And it is this that when we pay in the name of Allah, we shall not expect nor demand any worldly gains from the beneficiaries nor aim at making our names as philanthropists.
Zakat is as basic to Islam as other forms of 'Ibadat salat (prayers) and saum (fasting). Its fundamental importance lies in the fact that it fosters in us the qualities of sacrifice and rids us of selfishness and plutolatry. Islam accepts within its fold only those who are ready to give away in God's way from their hard-earned wealth willingly and without any temporal or personal gain. It has nothing to do with misers. A true Muslim shall, when the call comes, sacrifice al his belongings in the way of Allah, for Zakat has already trained him for such sacrifice.
The Muslim society has immensely to gain from the institution of Zakat. It is the bounden duty of every well to do Muslim to help his lowly placed poor brethren. His wealth is not to be spent solely for his own comfort and luxury there are rightful claimants on his wealth, and they are the nation's widows and orphans, the poor and the invalid those who have ability but lack the means by which they could seek useful employment, those who have the faculties and brilliance but not the money with which they could acquire knowledge and become useful members of the community. He who does not recognize the right on his wealth of such members of his own community is indeed cruel. For there could be no greater cruelty than to fill one's own coffers while thousands die of hunger or suffer the agonies of unemployment. Islam is a sworn enemy of such selfishness, greed, and acquisitiveness. Disbelievers, devoid of sentiments of universal love, known only to preserve wealth and to add to it by lending it out on interest. Islam's teachings are the very antithesis of this attitude. Here one shares one's wealth with others and helps them stand on their own legs and become productive members of the society.