Zakat al-Mal is related to the saved money, whereas zakat al-fitr is paid by the head of the household on behalf of the family members. Also, zakat al-Mal is to be paid when the savings reach the prescribed nisab (minimum amount on which zakat is due), but zakat al-Fitr is to be paid by the person who has food for one day. The two categories vary in the amount required for each.
In addressing this isssue, Dr. Muhammad Ahmad Al-Musayyar, states:
A Muslim should thank Allah for the gifts He bestowed upon him and cooperate with the people and share with them their feelings. So he must pay the zakat, lend to the needy, and help in charitable projects in order not to receive the punishment stated in the Qur’anic verse: (And there are those who bury gold and silver and spend it not in the Way of Allah: announce unto them a most grievous penalty. On the Day when heat will be produced out of that (wealth) in the fire of Hell, and with it will be branded their foreheads, their flanks, and their backs, “This is the (treasure) which you buried for yourselves: taste you, then, the (treasures) you buried!) (At-Tawbah: 34-35)
The following are the essential differences between zakat al-Mal and zakat al-Fitr:
Zakat al-Mal relates, as its name implies, to the saved money; however, zakat al-Fitr is paid by the head of the household on behalf of the family members. Also zakat al-Mal is to be paid when the savings reach the prescribed value, which is equal to 20 mithqals of gold and 200 dirhams of silver. There is no fixed nisab for zakat al–Fitr, but it is to be paid by the person who has one day meals and the members of his family on the eve of `Eid Al-Fitr. Besides, zakat al-Mal can be paid at any time of the year as long as the nisab remains in one’s possession for one year. Zakat al-fitr must be paid by the person who witnesses part of the month of Ramadan and part of the month of Shawwal.
On the other hand, the amount of zakat al-Mal is a fourth of a tenth, i.e., 2.5 per cent of one’s wealth. But the amount of zakat al-Fitr is two qadahs (an old measure) of rice or wheat or other usual food known in the area or their equivalent.
The evidence of the above is the hadith recorded in the two authentic books of Hadith (namely Al-Bukhari and Muslim), and reported by Ibn `Umar (may Allah be pleased with him): “The Messenger of Allah (may peace and blessings be upon him) prescribed zakat al-Fitr as one saa` (an old measurement) of dates or wheat on every person whether male or female from among the Muslims.” In another authentic hadith, the Messenger of Allah is reported to have ordered that zakat al-Fitr be paid out before going to the `Eid Prayer. This is done with a view to make all Muslims feel happy in that day.
It goes without saying that zakat al-Mal expresses the state of richness and satisfaction of the person who gives the zakat, as it is to be paid by the well-to-do people. On the contrary, zakat al–Fitr must be paid by both the rich and poor. Therefore, the poor should pay the zakat on behalf of his household in order to make him pay the zakat as he used to receive it from the rich. In addition, the purpose of the poor paying zakat al-Fitr is to help them get the reward promised by Allah for zakat on an equal footing with the rich. This, in turn, is to encourage them and honor their dignity. This is considered a great wisdom that cannot be found in any other religion or man-made system.