How to determine the unlawful percentage received from dividends?
March 31, 2016
Q: I would like to know with regards to investing in stocks and shares more specifically on purification of the income received as a result of an investment in a company that is sharia compliant according to your screening criteria outlined in the article on ‘investing in stocks and shares’ http://alqalam.org.uk/research-papers/investment-in-stocks-and-shares/. The question I would like to ask is, how do you find out what percentage of a company’s income has come from non-sharia compliant sources i.e. what specifically do look at on the balance sheet, meaning the western companies will not say that x amount of income is from interest for example, So what do you look for, where and what figures do you use, from the balance sheet or else where, to calculate the percentage that you need give to sadaqah?
الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب
A: If you cannot determine how much of the dividend is unlawful, i.e., you have no idea what proportion of investment and returns are halal/haram then you should not invest in to that company in the first place. If you know that the company does meet the screening criteria we have advised but are not able to determine the exact ratio of non-halal investment and return, then you should give to charity the maximum allowable limit of non-halal income as we have advised. If you are unable to determine this you should either consult a competent financial adviser or avoid investing in this sector.