Literally the word "Zakat" means purity and purification. It is a technical term of the Sacred Islamic Law which means:
"Certain portion or amount of property that is given thereof as the due of God by its possessor to the poor in order that he may purify himself thereby."
The payment of this due is obligatory provided that the property is of a certain amount and have been in his/her possession for one Lunar year. The portion to be given, varies according to the nature and amount of the property. Generally it is one-forth thereof i.e. two and a half percent.
Sadaquah is also a Qur'anic term which means Charity made in the way of Allah to seek His pleasure and it is to be rewarded in the life here-after.
There are two kinds of Sadaquah's:
(1).Obligatory (Farz) & (2).Voluntary (Nafal)
(1) Obligatory (Farz) Sadaquah :
Obligatory (Farz) Sadaquah is one , payment of which has been ordained by God in His Last Book,the Holy Qur'an. Zakat, Ushr, Zakat-ul-Fitr are obligatory Sadaquah's.
Great rewards have been promised by God for one who obeys His command and pays the Farz Sadaquah's to the deserving poor mentioned in His Book.
Zakat, the obligatory Sadaquah, purifies its giver of his/her sins and extols him/her by testifying his/her faith in Allah.
(2)Voluntary (Nafal) Sadaquah:
Voluntary (Nafal) Sadaquah are the charities made in addition to the obligatory Sadaquah's. The rewards for this kind of charities are also great as promised in the Holy Qur'an and Ahadith.