Islam is a complete code of life encompassing every aspect of human life. Prayer is the link between man and his Creator while Alms-Tax is the link with His Creation. Charity is not restricted to giving money only but charity of knowledge is teaching the ignorant. Man is a transitory owner of any kind of wealth as long as he lives, but the real owner of all resources is Allah, as mentioned in Surah al-Baqarah Ayah 284: “Whatever is in the heavens and the earth belongs to Allah.” Khums is one of the branches of Islam. In an Islamic state, every Muslim is a brother of other Muslim. Hence, a Muslim is persuaded and encouraged to give charity and alms for the collective welfare of the people. Zakat is prohibited to AhlulBayt, hence, Allah in His Infinite Wisdom has prescribed Khums for them. Following Ayahs show Allah's persuasions for charity and benevolence:

Surah al-Baqarah Ayah 3: “The pious are those who spend (in charity) from whatever We have given to them.”

Surah al-Baqarah Ayah 219: “They ask you (O' Muhammad) as to what they should spend (in way of charity). Say, whatever can be spared (from your wealth after your own expenses.)”

Surah Ale Imran Ayah 134: “The pious people (are) those who spend benevolently in good and bad days.”

The aim of Islam is to eliminate the needs of human beings. Hence, on collective basis, the Muslim society imposes Khums as a tax. During the time when the Commander of the Faithful Imam Ali (a.s.) was the Caliph, he was passing by, an old man who was begging on the side of the road. He asked “What is this? ” The people replied” He is a Christian.” The Imam said: “You have used him until he became old and unable to work. Provide for him from Public Treasury” Hence, economic security was extended to every subject irrespective of his religious belief. Imam Ali (a.s.)'s top priority was to establish social justice in the Muslim community. His humanitarian approach generated opposition in the elite who enjoyed special privileges.

In Arabic language “Khamsa” means “Five”. Hence, Khums literally means “One-fifth” or 20% of certain items which should be paid as Islamic Tax. The taxable items are; profit or surplus of the income, the legitimate wealth which is mixed with illegitimate wealth, mines or minerals, precious stones obtained from sea by diving, treasures, and other two which are not applicable now.

Khums is one of those things which were introduced by Hazrat Abdul Muttalib, the grandfather of the Noble Prophet (s.a.w.a.s.). Acting upon the command of Allah in a dream, he rediscovered the treasure found in the well of ZamZam. He gave away one-fifth (literally Khums) of the treasure in the way of Allah. Then it became the custom in his family. After the Migration (Hijrah), the same system was incorporated in Islam.

Khums is obligatory (Wa'ajib) as soon as the profit or surplus is known. A date may be fixed for the new year and each year the Khums may be calculated and paid. Reasonable expenses, according to one's social status, profession etc., may be deducted from the income. A faithful is aware that Allah knows the secrets of his heart, hence no one other than Allah knows what is reasonable!

According to the Ayah of the Glorious Qur'an, the recipients of Khums are: Allah, the Messenger of Allah, the near relatives of the Messenger of Allah, the orphans, the needy, and the stranded travelers.

Khums has two parts; Sahm-e-Imam and Sahm-e-Sadaat.

Because the share of Allah and His Messenger during the “Great Occultation” which is Sahm-e-Imam is now given to the Mujtahid or Marj'a who spends it for the general upliftment of Muslims and spread of Islam throughout the world.

The Sahm-e-Sada'at may either be given directly to the poor, needy, and pious deserving Hashimites-direct descendants of the Lady of Paradise Sayyida Fatima Zahra (s.a.) or to the Marj'a separate from Sehm-e-Imam.

All prayers of a Muslim should be performed with the intention of Pleasure of Allah, hence Khums and Zaka'at should not be considered as charity but a moral obligation and top priority should be given to the “Acceptance of our deeds” by Allah. Intentions are only perceived by Allah, hence we should be sincere in all our Ibada'ah and devotedly pray to Him for their acceptance.

Sources used:

Philosophy of Islamic Laws by Ayatullah Nasir Makaram Shirazi 

Khums by Allama Sayyid Muhammad Rizvi