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Questions you asked
Zakah (Poor Due Charity)
1.
What is the literal meaning of Zakah?
 
To purify, to increase or grow

2. What does Zakah (Poor Due Charity) purify?
  Wealth of Muslims
3. How does Zakah (Poor Due Charity) purify the wealth of Muslims?
  By sharing it with the less fortunate people
4. Does Zakah (Poor Due Charity) purify something else besides the wealth of Muslims?
  Yes, it purifies the hearts of Muslims from greed for money

Take alms from their goods, that so you might purify and sanctify them; and pray on their behalf, verily your prayers are a source of security for them: and Allah is One who hears and knows.
Surah (Chapter) at-Taubah (The Repentance)
Qur-an 9:103

5. What is Zakah (Poor Due Charity)?
  Zakah (Poor Due Charity) is sharing one's wealth with the poor and the needy.
6. Another meaning of Zakah is to grow; how does paying money can cause to grow it?
 

God (Allah) causes Barakah (Abundance) in the money from which Zakah (Poor Due Charity) is paid

7. Is it true that Zakah (Poor Due Charity) becomes a cause for its recipient also?
 

Yes

8. Is Zakah (Poor Due Charity) also known by some other name?
 

Yes, Zakah (Poor Due Charity) is also known as Sadaqah, both these words are interchangeable

Take alms from their goods, that so you might purify and sanctify them; and pray on their behalf, verily your prayers are a source of security for them: and Allah is One who hears and knows.
Surah (Chapter) at-Taubah (The Repentance)
Qur-an 9:103


9. Is Zakah (Poor Due Charity) world's first organized social welfare scheme?
 

Yes

10. Is paying Zakah (Poor Due Charity) a Fard‘Ibadah (Act of worship)?
 

Yes

11. Paying Zakah (Poor Due Charity) is Fard (Compulsory) because
 

It is commanded by Allah in the Holy Qur-an

12. What is the purpose of paying Zakah (Poor Due Charity)?
 

To please of Allah

13. Why are Muslims required to pay Zakah (Poor Due Charity)?
  God (Allah) asks for the payment of Zakah (Poor Due Charity) from the Mal (Possessions) He had given them

O you who believe! spend out of (the bounties) We have provided for you before the day comes when no bargaining (will avail) nor friendship nor intercession.  Those who reject faith they are the wrong-doers.
Surah
(Chapter) al-Baqarah (The Cow) Qur-an 2:254
14. Is paying Zakah (Poor Due Charity) as important as offering Salah (Prayers)?
  Yes, both are Fard (Compulsory) ‘Ibadat (Act of worship)

But if they repent, perform Salah and give Zakah, then they are your brethren in religion.
Surah at-Taubah (Repentance) Qur-an 9:11


15. How frequently is Zakah (Poor Due Charity) paid?
  Every year
16. Is there any penalty for those who ignore Zakah (Poor Due Charity)?
  Yes, there is severe punishment for those who do not pay Zakah (Poor Due Charity)

O you who believe! there are indeed many among the priests and anchorites, who in falsehood devour the substance of men and hinder (them) from the Way of Allah.  And there are those who bury gold and silver and spend it not in the Way of Allah: announce unto them a most grievous penalty.

On the Day when heat will be produced out of that (wealth) in the fire of Hell, and with it will be branded their foreheads, their flanks, and their backs--"This is the (treasure) which you buried for yourselves: taste you, then, the (treasures) you buried!"
Surah (Chapter) at-Taubah (The Repentance) Qur-an 9:34-35


17. All religions consider charity as a good deed, is it any different in Islam?
  Islam does not consider Zakah (Poor Due Charity) merely as a good deed; it is a fundamental part of Islamic faith, a Fard (Compulsory) ‘Ibadah (Act of Worship)
18. If Zakah (Poor Due Charity) is that important, why was not a worldwide central collection system devised for it?
  God (Allah) has left it on our judgment; He has told us about our obligations, and has given us the faculty of logic to decide what is right and wrong
19. Who decides about spending the Zakah (Poor Due Charity) money?
  God (Allah) has clearly defined how these funds will be spent

Sadaqah (Zakah) funds are only for the poor and the needy, and those who are employed to collect them, and to attract the hearts of those who have been inclined (towards Islam), and to free the captives, and for those in debt, and for Allah's cause and for the traveler; a duty imposed by Allah. And Allah is All-Knower All-Wise.
Surah (Chapter) at-Taubah (The Repentance) Qur-an 9:60


20. Is Zakah (Poor Due Charity) not similar to tax, which is collected by various governments?
  No, it is quite different, it is to be spent specifically on the purposes spelled out by God (Allah); and no one can divert it to serve their personal or political gains