Key points
For a dividend: multiply the amount received by the company’s share of non-compliant income (for example 2% of its revenue). For interest: the whole amount must be purified. In both cases, the sum is given to the poor or to works of public benefit, without expecting any reward, and it is counted neither as zakat nor as charity.
What the institutions say
Official positions, with their reference. The badge sums up the institution’s position, not an opinion of Assabile.
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AAOIFI Accounting and Auditing Organization for Islamic Financial Institutions, BahrainUnder conditions
The investor must get rid of the part of the company’s income that comes from a forbidden source; he calculates this part from the company’s accounts, in proportion to his shares.
Shariah standard 21 (financial papers)
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International Islamic Fiqh Academy Organisation of Islamic Cooperation, JeddahUnder conditions
The interest that the Islamic Development Bank receives, for lack of an alternative, on its deposits with foreign banks may not be used to protect the value of its funds: it must be spent on works of public benefit (training, research, relief, aid to member countries, schools).
Resolution 13 (1/3), 1986
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Diyanet Presidency of Religious Affairs, Türkiye (High Council of Religious Affairs)Under conditions
Unlawful income is given to the poor without expecting any reward; it must not be used to build or maintain mosques.
Fatwa of 2024 on unlawful income
Positions are reported as they stand; other scholars may hold other views. Method and disclaimers
Depending on your country
- France
- Purification changes nothing for tax purposes: taxable interest remains taxable, even if it is given away.
- United Kingdom
- Several Islamic funds publish a dividend purification rate in their annual report.
- Türkiye
- An association or a poor family among the people around you can receive the sum; Diyanet advises against giving it to mosques.
What is purified
- Interest received on an account, a savings account or a bond: in full. The Qur’an leaves only the capital: “you may have your principal” (al-Baqarah 2:279).
- The non-compliant part of a dividend: the fraction of the company’s income that comes from interest or from a forbidden activity.
- Gains on a share that has become non-compliant, from the moment it dropped out of the screen, according to several boards.
Calculating the part of a dividend
- Find the company’s non-compliant income in its accounts (interest income, revenue from excluded activities).
- Divide it by its total revenue: this is the purification rate (for example 1.8%).
- Multiply your gross dividends by this rate.
| Dividends received | Company’s rate | To purify |
|---|---|---|
| €400 | 1.8% | €7.20 |
| €1,000 | 0.5% | €5.00 |
The purification calculator does this calculation line by line and keeps a log for each year.
Who to give it to
To the poor, or to works of public benefit (a hospital, a well, a road, disaster relief), without seeking any reward: it is not charity, but getting rid of property that does not belong to us. Diyanet asks that it not be used for a mosque; scholars differ on this point.
What does not count
- Paying your taxes or bank charges with this money: there is disagreement, and most scholars reject it.
- Counting it as zakat: zakat is paid on lawful wealth.
- Keeping it “for later”: you purify as soon as you know the amount, or at the latest once a year.
The verses
فَإِن لَّمْ تَفْعَلُوا۟ فَأْذَنُوا۟ بِحَرْبٍ مِّنَ ٱللَّهِ وَرَسُولِهِۦ وَإِن تُبْتُمْ فَلَكُمْ رُءُوسُ أَمْوَٰلِكُمْ لَا تَظْلِمُونَ وَلَا تُظْلَمُونَ ٢٧٩
And if you do not, then be informed of a war [against you] from Allāh and His Messenger. But if you repent, you may have your principal - [thus] you do no wrong, nor are you wronged.
The hadiths
O people, indeed, Allah is good and does not accept except what is good. Indeed, Allah has commanded the believers with what he commanded the messengers
"O people, indeed, Allah is good and does not accept except what is good. Indeed, Allah has commanded the believers with what he commanded the messengers. He says: {O messengers, eat from the lawful things and act righteously, for I am All-Knowing of what you do.} [Surat al-Mu’minūn: 51] And He…
أَيُّهَا النَّاسُ إِنَّ اللَّهَ طَيِّبٌ لاَ يَقْبَلُ إِلاَّ طَيِّبًا وَإِنَّ اللَّهَ أَمَرَ الْمُؤْمِنِينَ بِمَا أَمَرَ بِهِ الْمُرْسَلِينَ فَقَالَ { يَا أَيُّهَا الرُّسُلُ كُلُوا مِنَ الطَّيِّبَاتِ وَاعْمَلُوا…
Frequently asked questions
Do capital gains need to be purified?
Most boards do not require it for a share that has remained compliant; some purify capital gains at the same rate as dividends as a precaution.
Does an Islamic fund purify on my behalf?
Some funds carry out the purification themselves and say so in their documentation; others publish a rate and leave the investor to do it.