Using Zoya App To Purify Stocks

💰 Everyday Islamic Finance Savings & Investing
#1

Salam Everyone,

I just had a question on which purification method is correct to purify stocks?

Method 1: Multiplying the % not permissible by the capital gains

Method 2: Total Non-Permisslbe Income/Total Income multiplied by capital gains

#2

There are three major opinions when it comes to purification:

  1. Purify dividends only
  2. Purify capital gains only (there are 2 different ways to do this)
  3. Purify both dividends and capital gains

We’ve covered one of the capital gains purification methods in our FAQs which you can read here. However, the method you described is also considered valid by some scholars since it’s much simpler to calculate. @Malak_Kudaimi also touched on this method in her article on the Zoya blog about purifying retirement accounts (link below).

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#3

Assalamu alaykum,

So I finally have a portfolio, and invested in shariah compliant funds, and stocks. But what I am learning through the Zoya app, is that even compliant stocks have portions that are non compliant or questionable. And even compliant funds, have stocks that are non compliant.

So now how do I figure out how much to purify?

  1. What is the formula to calculate how much dividends to purify? and capital gain?
  2. Where do I find the numbers (dividend, and capital gains. etc) to plug in to the formula
  3. How often should I purify?

Its all very confusing for someone who is just trying to learn what a dividend is. Would appreciate some guidance.

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#4

Walaikum Assalaam,

I’ve moved your question to this existing thread on the same topic.

  1. Check out Saad’s answer above for an answer.
  2. You should be able to find the numbers from your brokerage. Depending on the brokerage, it might be available in a dashboard or in a report. Let me know if you need help reaching out.
  3. The blog post gives examples of different times you can purify and what to consider when you do.

For all matters of fiqh and best practice, I always recommend reaching out to your local imam or scholar.

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#5

Is there a plan to calculate purification inside the app similarly to zakat? The zakat calculation is VERY helpful. It seems like you already have all the data necessary for the purification calculation. If we have a diversified portfolio with hundreds of stocks, it’s not practical to check each one individually. Thank you.

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