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What Allah has bestowed on His Messenger (and taken away) from the people of the townships,- belongs to Allah,- to His Messenger and to kindred and orphans, the needy and the wayfarer; In order that it may not (merely) make a circuit between the wealthy among you. So take what the Messenger assigns to you, and deny yourselves that which he withholds from you. And fear Allah; for Allah is strict in Punishment.

The Jews had originally come from outside
Arabia, and seized on the land near Madinah. They
refused to adapt themselves to the people of Arabia, and
were in fact a thorn in the side of the genuine Arabs of
Madinah. Their dispossession is therefore a restoration of
the land to its original people.
But the word “Fai” is here understood in a technical
sense, as meaning property abandoned by the enemy or
taken from him without a formal war. In that sense it is
distinguished from “Anfal, or spoils, taken after actual
fighting, about which see 8:1 and 41.


“The people of the townships”:
the townships were the Jewish settlements round
Madinah, of the Banu Nadir, and possibly of other tribes.
Cf. the -townships- mentioned in 59:14 below.
The reference cannot be to the Wadi-ul-Qura (Valley of
Towns), now Madain Salih, which was subjugated after
Khaybar and Fadak in A.H. 7, unless this verse is later
than the rest of the Surah


. “Belongs to Allah”: i.e., to Allah’s Cause; and
the beneficiaries are further detailed.
No shares are fixed; they depend upon circumstances,
and are left to the Judgement of the Leader.
Compare a similar list of those entitled to Charity, in
2:177, but the two lists refer to different circumstances
and have different beneficiaries in addition to the portion
common to both

References:

Yusuf Ali, Abdullah. Translation and Commentary of the Quran. (surah 59 verse 7 Quran Arabic with English Translation & Commentary (Tafsir) by Abdullah Yusuf Ali, Free Download (quran4u.com)

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