“The one who withholds zakāh will be in the Fire on the Day of Resurrection.”

Narrated by al-Ṭabarānī in al-Ṣaghīr (no. 935), from the ḥadīth of Anas ibn Mālik (may Allah be pleased with him).
Authenticated in Ṣaḥīḥ al-Jāmiʿ (no. 5807) and Ṣaḥīḥ al-Targhīb wa al-Tarhīb (no. 762).

Brief Explanation of the Hadith

Zakāh (obligatory charity) is one of the great pillars of Islam, incumbent upon every Muslim who meets its conditions. He should pay it willingly in order to establish a pillar of his religion and achieve the immense reward. A severe warning has been given to those who withhold it, as the Prophet — may Allah’s peace and blessings be upon him — said: “The one who withholds zakāh will be in the Fire on the Day of Resurrection.”
In essence, withholding zakāh is a major sin among the grave offenses. This withholding may take various forms: if one withholds it out of denial of its obligation while living among Muslims, this constitutes disbelief that expels a person from the fold of Islam — for it is a rejection of a fundamental pillar of the religion, known by necessity. Such a person is to be called to repentance; if he repents, it is accepted, but if he refuses, he is to be executed. And if he possesses power or followers, the ruler is to fight him, as Abū Bakr — may Allah be pleased with him — did with the apostates.
If one withholds it out of miserliness or negligence while acknowledging its obligation, it is to be taken from him by force, and half of his wealth is to be taken in addition, as stated in the authentic ḥadīth. However, if one withholds it out of ignorance of its obligation — such as a person newly entered into Islam or someone who grew up in a remote desert away from the Muslim community — he is excused due to his ignorance and must be taught.
Just as withholding zakāh is among the major sins, so too is spending it in ways other than its lawful categories. Both carry a severe warning — and we ask Allah for safety and pardon.