Firstly we should know that Allah commands His believing servants to spend on charity. Ibn Abbas states that this should from the pure, honest money they have earned and from the fruits and vegetables that have been grown for them in the land.
Ibn Abbas said: “Allah commanded them to spend from the purest, finest and best types of money, and prohibited them spending from evil and dishonest money because Allah is pure and good and only accepts that which is pure and good.” [Ibn Kathir: 1/630]
Allah also said:
“O you who have believed, spend from the good things which you have earned and from that which We have produced for you from the earth. And do not aim toward the defective therefrom, spending [from that] while you would not take it [yourself] except with closed eyes. And know that Allah is Free of need and Praiseworthy.” [Al-Quran, surah Al-Baqarah (2): 267]
Abu Huraira narrated that Allah’s Messenger (ﷺ) said:
“If one give in charity what equals one date-fruit from the honestly earned money and Allah accepts only the honestly earned money –Allah takes it in His right (hand) and then enlarges its reward for that person (who has given it), as anyone of you brings up his baby horse, so much so that it becomes as big as a mountain.” [Refer Sahih al-Bukhari, hadith no. 1410]
Abu Hurairah narrated that the Messenger of Allah said:
“O people, Allah is tayyib (good) and does not accept anything, but that which is good. Allah has enjoined on the believers what He has enjoined upon the Messengers. He (ﷺ) says: “O messengers, eat from the good foods and work righteousness. Indeed, I, of what you do, am Knowing” [Al-Quran, surah Al-Mu’minun (23): 51], And Allah says: “O you who have believed, eat from the good things which We have provided for you and be grateful to Allah if it is [indeed] Him that you worship.“ [Al-Quran, surah Al-Baqarah (2): 172]
Then Allah’s Messenger (ﷺ) said:
“O people, Allah is Good and He, therefore, accepts only that which is good. And Allah commanded the believers as Allah commanded the Messengers by saying: “O Messengers, eat of the good things, and do good deeds; verily I am aware of what you do“. And Allah said: “O those who believe, eat of the good things that We gave you“. He (ﷺ) then made a mention of a person who travels widely, his hair dishevelled and covered with dust. He lifts his hand towards the sky (and thus makes the supplication): “O Lord, O Lord,” whereas his diet is unlawful, his drink is unlawful, and his clothes are unlawful and his nourishment is unlawful. How can then his supplication be accepted?” [Refer Sahih al-Muslim, hadith no. 1015]
It was narrated from Simak bin Harb, that Mus’ab bin Sa’d said:
“Abdullah bin ‘Umar came to visit Ibn ‘Amir when he was sick and he said: ‘Won’t you supplicate to Allah for me, O Ibn ‘Umar ?’ He said: ‘I heard the Messenger of Allah (ﷺ) say: ‘No Salat is accepted without Wudu’ (purification), and no charity (is accepted) that comes from Ghulul ’ and you were the governor of Al-Basrah.”  Goods pilfered from the spoils of war prior to their authorized distribution. [Refer Sahih al-Muslim, hadith no. 224]
However, this condition excludes (from the payment of zakat) wealth acquired by unlawful means, such as theft, counterfeiting, bribery, interest (usury), monopoly or cheating. This may include most of the wealth of autocratic rulers, interest financiers, thieves, etc. Such individuals do not own the stolen properties which are in their possession, although they might have mixed them with property obtained by lawful means.
NOTED THAT – Scholars declare that impure wealth is not to have zakat paid on it because such wealth must be returned to its true owners if know, or to his/her heirs, and if not, then to the poor and the needy. It is not sufficient that only a small part of such assets is given out as Zakat [Refer Fiqh Al-Zakah]