Articles
Purging
1. METHODOLOGY OF PURGING INTEREST INCOME
Mufti Abdul Kadir Barkatullah
S. M. Wasiullah
The process of removing interest income from total income is
known as interest purification or purging. It is one of the important
requirements of the Sharīʿah when undertaking Islamic investments.
Purification can be either of interest income only or of different kinds
of impure income.
Interest income is accrued on bank deposits, loans advanced
or interest-based investments. It is reported as ‘Interest Income’
in financial statements of companies. Generally, interest income is
reported as a part of Total Income. The company benefits from the
accrued interest income by utilising it for meeting its costs or expenses
from various operations or for paying dividends and creating reserves.