I want to purify my profits. What to do?

Everyday Islamic Finance Business and Career Questions
#1

Assalam o Alaikum. I want to purify my profits as much as possible to not earn any haram money. Since debt to total assets ratio allowed is 33% and haram revenue allowed is 5%. Should i only give 5% of my profits to charity or 38%(debts to total assets ratio+haram revenue) of my profits. I dont even want a single haram penny. What should i do?

#2

Wasalam

May Allah bless you.
I believe only 5% from the haram income should be given away.

And Allah knows best!

#3

Assalamu alaikum @Mufti_Faraz_Adam / @Mufti_Billal,
Question 1:

Last year I have bought a stock which I now found that it is failing shariah compliancy in the income

Non-Operating Interest Income: 75K
Gross Revenue = 584K

so 75/584 = 12.85% (which is >5%)

Now the value of the portfolio increased by $3000. If I sell the stock now, do I have to purify my gains (I haven’t received any dividends for this stock).

Question 2:

While checking for Income statement for <5% non-compliant income, can I substract Interest expense from Interest income

eg: (Interest income - Interest expense)/gross revenue <5%

Question: 3

Do we have to look for Annual Reports or Quarterly Reports for Income Statement/Balance Sheets because sometimes the compliancy checks pass in one report and fail in other

#4

@Mufti_Faraz_Adam / @Mufti_Billal, can you please reply for my questions?

#5

Wasalam

  1. Yes you would need to purify your gains according to the percentage of haram income received by the company

  2. You should not substract the interest expense unless if it is proven that the expense is paid to the same company that has paid the interest to your company.

  3. Always try to check the most recent report I believe.

And Allah knows best!