Zakat Expenditure

‘Ata b. Yassar reported that the Apostle of Allah (Sall Allah-o-alaihe wa sallam) said: “The sadaqa is not lawful for a wealthy person save in five cases (persons): One who fights in the cause of Allah, its collector, the debtor, a person who purchased the sadaqa for his property, and a person whose needy neighbour was given something in charity who in turn sends it to the wealthy person as a gift.”

Abu Sa‘id reported that the Apostle of Allah (Sall Allah-o-alaihe wa sallam) said: “sadaqa is not lawful for a rich person except (when he fights) in the cause of Allah, or is a wayfarer, or (if he has) a poor neighbour to whom he gives sadaqa and then he returns it to you as a gift or invites you (on a meal).”

Source: Economic Teachings of Prophet Muhammad (peace be upon him): A Select Anthology of Hadith Literature on Economics, Muhammad Akram Khan. Republished with permission.