WIDE PROBLEM AREA Islam is a religion that guides us in all aspects of social life through the Quran. The Quran also provides guidance on financial and economic structure. The data highlights that only 20% of the world's inhabitants live with a high level of comfort and luxury, while the vast majority of people face poverty, ignorance, malnutrition and many of them live on less than a dollar a day. The rift between the two lives grows day by day. The widening of this gap is supported by some policies that disturb the income and wealth of both parties. The strange thing is that such situations originate in the same country, where there are areas/segments/groups that face harsh manifestations of low living standards, while others live in the same country in a completely different life of luxury and wealth. This is due either to procedures that lead to poor distribution of income and wealth, or to policies that would widen the income gap, or both. Zakat is obligatory for all Muslims, men and women, who possess a certain wealth limit, to pay a recommended amount of capital or savings such as agricultural produce, livestock, business, cash and precious metals such as gold and silver every year. The Quran has mentioned Zakat more than eighty times. It is a duty of Allah similar to the duty of 'Salat'. Zakat, if observed and performed as ordained by Allah, is capable of eliminating poverty and income inequality in Muslim populations. As one of the pillars of Islam, Zakat can eradicate poverty and achieve equality in income distribution among members of the Muslim community. It is worth noting that financial assets in banks for rich Arabs, their amount is valued at more than 1190 ...... half of the paper ......" (6: 165)Zakat can prove to be a real blessing if it is used for productive and constructive purposes for the permanent benefit of the poor. Only then will it encourage investment and saving. Distributing money among the poor and needy directly after taking it from the rich is not at all sufficient economy If we use this Islamic institution intelligently, abolish it with the old feudal system and wipe out corruption, the country can transform into a true welfare state TECHNIQUE Data is collected through various articles and journals related to Zakat and its impact on the economies of different countries. TIME/BUDGET This research is based extensively on reading articles and journals from different sources related to the impact of Zakat on the economy of a country and the research takes approximately 2-3 weeks.