Charity is systematized in Islam in various forms. While sadaqa (charity) is voluntary, zakat is incumbent upon every Muslim who has a certain amount of wealth. Zakat is derived from tazakka which means "to purify." Zakat, thus, denotes keeping one's wealth cleansed and sacred by giving 2.5 per cent to the poor. This consequently makes the believer and his wealth grow in purity and sincerity (Tawba 9:103). Purifying alms is a very important pillar of Islamic practice and this is confirmed by its association with the daily prayers (salat) 82 times in the Qur'an.

Charity is a merit encouraged by all divinely revealed religions and other belief systems. Islam does not forbid obtaining possessions, which is the nature of mankind; but Islam enjoins the rich to share their wealth with the poor. God is the only true owner of everything and He has assigned a rightful due for the poor over the wealth of the rich; therefore, to declare a claim over one's possession and to refuse to share with the poor is in fact confiscating the rights of the poor and is a violation of human rights.
Satan frightens you with poverty and bids you into indecencies (to spend thereon), whereas God promises you forgiveness from Himself and bounty. God is All-Embracing (with His mercy), All-Knowing. (Baqara 2:268)

God, on the other hand, has promised that wealth will never be decreased by charity.

Say: "Surely God enlarges provision for whom He wills of His servants, and restricts it (for whom He wills). Whatever you spend (in God's cause and in charity), He will replace it. He is the Best to be sought as provider with the ultimate rank of providing." (Saba 34:39)

Zakat is an obligatory form of charity taken from one's savings. It is not an income tax, but a savings tax. Its major recipients are the working poor, who cannot meet all of their needs without some additional help, and the destitute, who cannot even meet their basic needs. It is also used to pay off the debts of those who are unable to pay off their own debts, to free slaves, and ransom prisoners of war.

Zakat is also an important virtue of Muslims and God warns those who fail to observe it of "a painful punishment," as described in the following verses of the Qur'an.

The believers, both men and women, are guardians, confidants and helpers of one another. They enjoin and promote what is right and good and forbid and try to prevent the evil, and they establish the Prescribed Prayer in conformity with all its conditions, and pay the Prescribed Purifying Alms. They obey God and His Messenger. Those are they whom God will treat with mercy. Surely God is All-Glorious with irresistible might, All-Wise. (Tawba 9:71)

Those who hoard up gold and silver and do not spend it in God's way (to exalt His cause and help the poor and needy): give them (O Messenger) the glad tidings of a painful punishment. (Tawba 9: 34)