This is also known as Qurbani or sacrifice. It is Wajib upon all mature Muslims who, on the day of `Eid al-Azha, possess Nisab. Whoever qualifies for this is required to purchase a sheep or goat of more than one year in age, and slaughter that in the name of Allah after the ‘Eid prayer preferably on the same day. The sacrifice can also be done on the two days after Eid. If one fails to make the sacrifice in these three days he will still have to donate the value of the animal (this remains Wajib).
From the meat he may eat himself and feed his family and also distribute meat amongst the poor Muslims. One is not responsible to give Zakah or any necessary Sadaqah for one’s spouse nor one’s mature children – they are responsible for themselves. One is however, responsible for only giving sadaqah al-fitr for one’s minor children, however, neither Zakah is given from their wealth, nor Udhiyyah given on their behalf.
Note: One may slaughter goats or sheep, which constitute one sacrifice each, or one may slaughter a larger animal (i.e. cow or buffalo) which will be counted as seven sacrifices each. In the event of living in a wealthy country, it is better that one sacrifices one part locally to fulfil the Sunnah of sacrificing oneself; and to arrange for the remaining sacrifices to be performed in a poorer country, where the poor may also partake of it.
Dam is of two types. one is like Udhiyyah in the sense that it is a religious requirement on adult Muslims. The only difference is that it is specific to people who are performing Hajj. This Dam is called Dam ash-Shukr.
The second type of Dam, like fidyah, is a means of compensation for mistakes in Hajj, but the difference is the magnitude of the mistake. Fidyah is given in lieu of minor mistakes while Dam is in lieu of major mistakes. Dam, like Udhiyyah, is the sacrifice of a sheep or goat. It can also be made a part (i.e. 1/7) of a larger sacrifice.
Badanah is like Dam, but while Dam is the sacrifice of a sheep or goat, Badanah is the sacrifice of a large animal, i.e. a cow or camel. This is the largest penalty in Hajj, and is specific to three acts.