Zakat is the obligatory annual charity in Islam — typically 2.5% of qualifying wealth held for a lunar year — paid by Muslims whose wealth exceeds the Nisab threshold.

Zakat applies to savings, gold, cash, and investments above Nisab. It's both a religious duty and a good reason to know your net wealth each year, since gold and investment holdings are usually zakatable.

In Pakistan: zakat is deducted from some bank accounts during Ramadan, but many people calculate and pay it themselves.

Example: if your zakatable wealth is Rs 10 lakh and sits above Nisab for the year, your zakat is about Rs 25,000.

Don't confuse it with: sadaqah — voluntary charity, with no fixed rate.

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