Breakdown
How it works
Shariah screens allow companies with under 5% impermissible income (interest, conventional finance, minor prohibited activities). The investor "purifies" by donating that proportion of dividends received — and, under some scholars, of capital gains. The donation is not zakat and goes to general charity.
Formula
Worked example
2,500 dividends from a company with 2.5% impermissible income: give away 62.50.
Frequently asked questions
Do I purify capital gains?
AAOIFI standard 21 says dividends only; some scholars (and apps like Zoya) offer a gain-based method. Follow your chosen methodology consistently.
What if I hold a fund or ETF?
Shariah funds purify at fund level and report it; for conventional index funds, purification is impractical — switch to a screened fund.
Where should the money go?
Any charitable cause except building mosques or Quran printing (as it is tainted money); it must not benefit you.