Lexically, the word Zakah covers two meanings.
2. Growth and increase
In the terminology of the Quran and Sunnah, Zakah is the portion of asset that is made mandatory to be spent in the ways specified by Allah Ta’ala.
Benefits of Zakah
Zakah has two straightforward benefits.
Firstly, the payer himself gets purified from inner germs of the spiritual diseases.
Secondly, Zakah helps those who are not able to fulfill their needs independently. For e.g. orphans, widows, handicaps, poor people etc.
Allah Ta’ala says in Surah Taubah:
Take sadaqah (obligatory alms) out of their wealth through which you may cleanse and purify them, and pray for them. Indeed, your prayer is a source of peace for them. And Allah is (All-) Hearing, (All-) Knowing. (103)
This verse has explicitly mentioned the first benefit i.e. purification of inner self. The second benefit is not mentioned in this verse. It points to the fact that the real purpose and objective of paying Zakah is the purification of one’s own self, though the second benefit exists in its inference. (Ma’ariful Quran)
Retribution for not giving Zakah
Allah Ta’ala says in the Quran:
“As for those who accumulate gold and silver and do not spend it in the way of Allah, give them the ‘good’ news of a painful punishment” (34) on the day it (the wealth) will be heated up in the fire of jahannam, then their foreheads and their sides and their backs shall be branded with it: “this is what you had accumulated for yourselves. So, taste what you have been accumulating.”(35)
The holy prophet (PBUH) said:
Every nation that does not give Zakah, Allah Ta’ala will afflict them with a drought.
Narrated Abu Huraira: Allah’s Messenger (PBUH) said,
“The person whom Allah has bestowed with wealth, yet does not give its Zakah, on the Day of Judgment, his wealth will be turned into venomous bald serpent with two black spots over the eyes (or two poisonous glands in its mouth) which will wind around his neck and bite his jaws and say: ‘I am your wealth, I am your treasure.’ “Then the Prophet (PBUH) recited the holy Verse: “Let not those who covetously withhold….” (to the end of the Verse).
Sahih Al-Bukhari Hadith 1315 and 4199