Question 1

What is dividend purification in Islam?

Accepted Answer

Dividend purification is the process of calculating and donating the portion of investment income that comes from non-Shariah-compliant business activities. Even when a stock passes overall Shariah screening, some small percentage of revenue may come from prohibited sources. Muslim investors donate this portion to charity.

Question 2

How do you calculate purification amount?

Accepted Answer

The purification amount is calculated by multiplying your total dividend income by the company's prohibited income ratio. For example, if a company has 3% prohibited income and you received $100 in dividends, you would purify $3 by donating it to charity.

Question 3

Is dividend purification mandatory?

Accepted Answer

Most Islamic scholars consider dividend purification necessary when investing in stocks that have any level of prohibited income, even if the stock is classified as halal overall. The AAOIFI standard recommends purifying the prohibited portion of your investment returns.

حاسبة التطهير