Steps on How a Muslim Can Purify Their Wealth
Purifying wealth in Islam means ensuring that your income and investments are free from impermissible (haram) elements and that any unintentional non-compliant income is removed and given to charity so your remaining wealth remains spiritually clean and blessed.
The process has both general financial purification (e.g., zakat and charity) and investment-specific purification (e.g., purifying dividends from stocks).
1. Purify Through Zakat — The Core of Wealth Purification
Zakat in Islam is a form of purification.
The literal meaning of zakat in Arabic is “to purify and sanctify,” and giving zakat reminds Muslims that wealth is entrusted to them by Allah and must be cleansed from attachment and arrogance. (Wikipedia)
How to do it:
- Calculate your zakatable assets after one lunar year.
- Zakat is typically 2.5% of qualifying wealth above the nisab.
- Give it to eligible recipients: the poor, needy, debtors, travelers, etc.
Zakat cleans your wealth of greed and aligns your financial life with spiritual purpose.
2. Remove Any Interest (Riba) from Possessions
Interest (riba) is explicitly prohibited in Islam. (Wikipedia)
If at any time you accidentally earn bank interest or receive income that contains interest, you must remove that amount from your wealth.
Steps:
- Identify any interest earned (accidental or unavoidable).
- Give that exact amount to charity without intending reward, to remove it from your possession.
- This act does not count as zakat — it’s a separate purification donation.
This ensures your wealth is free from impermissible increase.
3. Purify Income from Investments — Especially Dividends
Even in publicly traded companies that pass Shariah screening, some portion of dividend income may be derived from non-Shariah income such as interest earned by the company or small taxable activities. (Home)
This is where investment purification comes in.
How to Purify Dividends
- Determine the impurity ratio — the percentage of a company’s revenue that comes from non-halal activities (usually published by Shariah screening providers).
- Multiply that ratio by the dividends you received.
- Example: If 2% of a company’s revenue is impure, you should donate 2% of your dividend. (fundingsouq.com)
- Donate the resulting amount to charity — not to yourself, not to subscribers, but to recognized charities or the needy.
This removes your portion of impermissible income from your portfolio.
You can also use tools like the Musaffa Purification Calculator to estimate how much to donate based on your shares and the stock’s impurity ratio.
4. Purify Capital Gains (Conditionally)
Capital gains (profit from selling an investment) are not automatically impure according to most scholars, because gain reflects change in value rather than operating income. (fundingsouq.com)
However, if the company earned non-compliant income during the period you held the shares and that impermissible income contributed to its retained profits, some scholars consider a pro-rated purification appropriate. (sharlife.my)
This is less commonly practiced and often depends on scholarly opinion, but where done:
- Calculate the non-halal ratio of revenue.
- Apply it to the capital gains proportionately.
- Donate that amount to charity.
These methods vary across advisory bodies, but all agree that pure dividend income must be purified first.
5. Purify Through Regular Charity (Sadaqah)
Beyond zakat and impurity removal, Muslims are encouraged to give voluntary charity (sadaqah) regularly.
Charity:
- Purifies the soul. (Muslim Food Bank & Community Services)
- Removes greed and attachment to wealth.
- Invites barakah into earnings and distribution.
Sadaqah serves as a spiritual clean-up even when income appears halal.
6. Maintain Ethical Earnings and Avoid Haram Activities
Ensure wealth is acquired through:
- Honest work
- Fair trade
- Avoidance of exploitative hedging or gambling
- Steering clear of businesses that violate Shariah
This reduces the need for later purification.
7. Review and Repeat Annually
Purification is an annual discipline.
At the end of each lunar year or financial cycle:
- Re-assess your holdings (stocks, dividends).
- Calculate zakat and purification donations.
- Donate and reset your income portfolio.
This ensures your wealth remains spiritually and financially clean over time.
Why Purification Matters
Purification protects your wealth from spiritual impurity, maintains integrity in your financial life, and aligns your financial behavior with Islamic values. It is both a religious obligation and a long-term strategy for barakah and ethical prosperity. (academy.musaffa.com)
Sources:
- Musaffa — Wealth Purification Guide & Calculator
https://musaffa.com/purification/ - Musaffa Academy — The Importance of Purification in Halal Investing
https://academy.musaffa.com/the-importance-of-purification-in-halal-investing/ - AAOIFI Shariah Standards
https://aaoifi.com/shariaa-standards/ - S&P Global — Shariah Indices Methodology
https://www.spglobal.com/spdji/en/documents/additional-material/faq-shariah-indices-methodology.pdf - Islamicly — Purification of Shariah-Compliant Equities Guide
https://blog.islamicly.com/halal-investing-guide/purification-of-shariah-compliant-equities/ - Bursa Malaysia — Purification of Shariah-Compliant Equities
https://my.bursamalaysia.com/learn/knowledge/explorer/purification-shariah-compliant-equities
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Marifat Fayz