This is the compulsory alms-giving which Allah has given the order for in the Qur’an. Its status is Fardh. Zakah is only eligible upon mature, sane men and women who meet Nisab threshold. 2.5% of their wealth must then be given. Zakah must only be given to the specific eight categories mentioned in the Qur’an. If it is not given to any of them, then it will be void and necessary to re-pay. So donate to charity Zakat and fulfil the right of your wealth that Allah has bestowed upon you.
This is the general term used for giving charity in Islam. All acts of worship through financial expenditure are, by broader definition, classified as Sadaqah. Due to there being many types, they have been divided into the following two categories both of which have separate rulings:
1. Sadaqah Wajibah
This is charity which is binding in nature. This includes Sadaqah al-Fitr, etc. This form of Sadaqah is similar to Zakah in that it must be spent on the same categories as defined by the Qur’an, except that it is not a condition for the beneficiary to be Muslim.
This type of Sadaqah includes:
a. Sadaqatul Fitr
e. Udhiyyah, Dam and Badanah
2. Sadaqah Nafilah
This is charity which is not binding in nature but is optional. This type includes alms given for the removal of difficulties, philanthropic (to give out of mercy to the less fortunate), the general giving of any Halal item to any one etc. This type does not need to be spent on the specified categories to be rewarding nor does it have to be spent on Muslims, although if spent on poor Muslims it would be more rewarding. This can also be bequeathed in one’s will (in which case it would be only up to a third of the deceased person’s entire estate).
The following are types of Sadaqah Nafilah:
d. Sadaqah for the upliftment of difficulties
e. Sadaqah for the expiation of sins
f. Charity above the amount of Zakat and Sadaqah Wajibah.
This Sadaqah is not a separate category but it is really any Sadaqah Nafilah which is spent on a cause of long term benefit (e.g. wells), and in essence is very similar to Waqf.
This literally means to give a good loan. In the language of the Qur’an this term is used for Sadaqah Nafilah. The rewards of Qardh Hasan are thus exclusive to Sadaqah. Loans given to Islamic institutes and then forgiven become this type of Sadaqah. Presently, this term is often used to denote Qardh.
Qardh This means an Islamic loan. Islamic here means that two things must be upheld from the side of the creditor: the first that neither interest can be charged nor any other benefit (advantage or gifts) be taken in lieu of the loan; the second is that at no time can the creditor show any signs of self-glory, or remind the debtor of the favour/help given (this does not mean that he/she cannot ask for payment). This type of loan may be given to either an individual or an institute, and if the conditions are upheld, it is immensely rewarding for the creditor.