Taken from: http://pakistanlink.com/religion/2001/1123.html
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Sadaqatul Fitr is a special charity of the month of Ramadan. This charity should be given during the month of Ramadan anytime before the Idul Fitr prayer. Because it can be given until the Idul Fitr time it is called Sadaqatul Fitr. The Prophet peace be upon him urged Muslims to pay this charity in the month of Ramadan.
Various reasons are given by scholars for this charity. Some say that this charity helps the poor and needy and takes care of their needs in the month of Ramadan and also makes it possible for them to celebrate the Id festival with other Muslims. Another view is expressed that this charity is to atone (as a kaffara) for any mistakes or omissions a person might have done during this blessed month.
Ibn ‘Abbas said: The Prophet peace be upon him enjoined Sadaqatul Fitr so that those who fast are purified of their errors and the poor and needy people are enabled to arrange for their basic needs of food, clothing etc. Therefore the Sadaqa of the person who gives before the Id prayer is the real Sadaqa, but if someone delays and gives it afterward his charity will be an ordinary charity (reported by Abu Dawud and Ibn Majah).
Sadaqatul Fitr is obligatory upon every Muslim, whether male or female, minor or major, who possesses property over and above his basic needs and requirements, amounting to the Nisab for Zakat, whether it is subject to Zakat or not. The amount of Nisab for Zakat is about 80 grams of gold or its equivalent in cash value. The head of the household must pay this amount on behalf of his/her own self and on behalf of their spouse, children and even servants.
The amount of sadaqatul fitr was fixed by the Prophet peace be upon him. It is about 5 pounds of wheat, flour, barley, dates or raisins. Jurists also allow paying cash to the poor and needy. The head of the household must pay this amount on behalf of all the members or the dependant, males or females, adults or children.
This sadaqa should be given during Ramadan any time but before the Idul Fitr prayers. The sadaqa should be given to the poor and needy. Individuals can also make the payments to Islamic charitable organizations that collect this fund. These organizations then should distribute these funds as soon as possible so that they reach to the needy people in time.
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