Zakat is an Islamic financial term that refers to donating a portion of wealth for charitable purposes every year. It is a compulsory process for every Muslim residing in any part of the world, as is considered a way of worship believed to purify the yearly income of an individual.
*There is no lower or higher limit of Sadaqah, and neither does it have any requirement. Sadaqah can be categorised into two categories based on its time span; namely, Sadaqah, which is considered a short-term donation
*Another financial term from the Islamic world worth noting is Nishab. The term Nishab refers to the minimum threshold of income required for an individual to be eligible to pay Zakat.
*However, in countries like Yemen, Pakistan, Saudi Arabia, Malaysia, Zakat is still regarded as a compulsory tax. Individuals have to face legal punishment upon failing to pay Zakat.