Zakat-ul-Maal is 2.5 % of your wealth due upon completion of one Lunar year. If Solar year is used then after every 32 Solar years one Lunar year is lost. Paying Zakat is Fardh (obligatory) upon Muslims; it has been mentioned 32 times in the Holy Qur’an with emphasis.

Prophet Muhammad Peace Be Upon Him said in a Hadith: “Allah has made it obligatory for them to pay the Zakat from their (Moslims) property and it is to be taken from the wealthy among them and given to their poor.” (Saheeh Bukhari: 1395; Saheeh Muslim 121 (19); Sonan Abee Dawood: 1584; Jame’ Tirmidhee: 625)

Zakat-ul-Maal becomes obligatory upon a Muslim when his wealth reaches the Nasaab (minimum Zakatable income). Nasaab is equal to 20 Dinar Gold ^{Sonan Abee Dawood: 1573} which is equivalent to 87.48 grams or 7.5 Tola Gold ^{Zakaat p46-47} or 200 Dirham Silver ^{Sonan Abee Dawood: 1572} which is equivalent to 612.36 grams or 52.5 Tola Silver Zakaat ^p46-47 or an equivalent amount which you have for one Lunar year. The year starts when the wealth reaches Nasaab and the Zakaat will be due upon the completion of that year. During the year the wealth may go up or down depending on your spending but Zakaat will be applicable on the final balance at the end of that year.

Nasaab for Gold or Silver is determined based on its weight and not on its price. Jurists have ruled that whatever contains more than 50% gold will be treated like gold and Zakat will be paid on its value. Therefore, Zakat will be applicable on anything more than 12 karats.
There are other forms of Zakat-ol-Maal applicable on the produce of agricultural land, trade property, trade animals etc. One should refer to books of Fiqh or ask an authentic scholar to know the details about various types of Zakat and see if it is applicable to one.

Who is Entitled to Receive Zakat-ul-Maal?

Following people are entitled to receive Zakat according to The Holy Qur’an: “The alms are only for the (1) poor and (2) the needy, and (3) those who collect them, and (4) those whose hearts are to be reconciled, and (5) to free the captives and (6) the debtors, and (7) for the cause of Allah, and (for) (8) the wayfarers (a traveler who is cut off from everything); a duty imposed by Allah. Allah is Knower, Wise.” The Holy Qur’an 9:60

Zakat can be given to relatives; in fact, it is Superior to give it to relatives. ^{Zakaat p143}. Zakat cannot be given to parents, grandparents, or to one’s children and grandchildren. A husband and wife cannot give Zakat to each other but a brother can give Zakat to his sister and vice versa. ^{Zakaat p143}. If one cannot determine whether the recipient is needy or not, then it is better to make a reasonable judgment before giving him Zakat. Zakaat will not be fulfilled by purchasing books for an institution, ^{Zakaat p143} or by construction of Masjid. ^{Zakaat p140}