Calculation Methodology & Standards

A transparent breakdown of how Hisaab tracks purchase charges, calculates FIFO capital gains, monitors Hawl lunar durations, and evaluates Nisab thresholds.
1.

Buy Charges & Average Price

How to account for Indian broker transaction costs without double-counting.

When using Indian brokers like Angel One, Zerodha, or Groww, the Average Price shown in your portfolio the next day (T+1) already includes your brokerage, STT, Exchange transaction charges, and GST.

Implementation Rules
  • •
    Method 1 (Recommended): Enter the Average Price from your broker app as the Buy Price, and enter 0 for Buy Charges. This prevents double-counting charges.
  • •
    Method 2 (From Contract Note): Enter the raw execution price as the Buy Price, and the total overall charges from your contract note into the Buy Charges field. Hisaab will pro-rate the charges across your shares automatically.
2.

Unrealized vs Realized Profit

Weighted average buy price for live holdings; FIFO matching for executed sells.

Unrealized Profit represents your paper gain or loss on active holdings. It is calculated using the Weighted Average Buy Price of all shares currently in your portfolio.

Realized Profit is calculated when you actually sell shares. Hisaab implements the FIFO (First-In, First-Out) method, matching your sold shares against your oldest chronological purchases. Buy-side charges are pro-rated so only the fraction belonging to sold shares is deducted.

Realized Profit = (Sell Price - Specific Oldest Buy Price) × Shares Sold - Pro-rated Buy Charges - Sell Charges
3.

Capital Gains & Dividend Purification

Purifying non-permissible earnings on gross profit and dividend payments.

Purification (Tasfiyah) is the process of donating non-halal income to charity without expectation of spiritual reward. Sharia scholars require purification to be calculated strictly on Gross Profit before deducting taxes, GST, or brokerage fees.

Purification Base = (Sell Price - Buy Price) × Shares Sold
Why are brokerage and transaction charges ignored?

Personal taxes (STT, GST) and brokerage commissions are payments made to service providers. Under AAOIFI standards, personal operating expenses cannot be used to offset or diminish the non-halal portion of income that must be purified.

The 5% Purification Threshold Rule

Under AAOIFI Standard No. 21, companies with non-permissible revenue below 5% of total income are conditionally eligible for investment, provided the exact proportion of non-halal income is purified. However, if non-permissible income reaches or exceeds 5%, the stock fails the Sharia screen. In Hisaab, such stocks must be classified as Non-Halal, requiring 100% purification of gains and immediate divestment.

Dividend Purification

When a holding distributes a dividend, Hisaab calculates the exact impure portion based on the company’s non-halal income ratio and tracks whether the obligation has been fulfilled.

4.

Zakat on Shares

2.5% obligation on eligible holdings held for Hawl (lunar year) exceeding Nisab.

Zakat on equities is an annual Islamic obligation of 2.5% on qualifying wealth held for a lunar year (Hawl ~354 days). Hisaab automates day-count tracking and threshold verification.

Implementation Rules
  • •
    Nisab Threshold: The minimum wealth criterion based on 87.48g of gold or 595g of silver. For modern stock holdings, Zakat applies to eligible investment surplus. Hisaab updates metal valuations daily.
  • •
    Hawl (1 Lunar Year): A holding must complete one lunar year (~354 days) before its profit becomes zakatable. Hisaab monitors holding duration per lot.
  • •
    Zakatable Wealth Basis: While classical fiqh distinguishes active trade inventory from long-term equity, Hisaab calculates Zakat as 2.5% on qualifying unrealized gains and realized profits for holding lots that have matured past the 354-day lunar Hawl.
  • •
    Exclusion of Haram Holdings: Stocks classified as Non-Halal (Haram) are excluded from Zakat because 100% of their gains must be divested and purified. Haram income cannot form a basis for Zakat.
5.

Dividend Tracking & Historical Records

Logging dividend cash flows and linking each distribution directly to purification.

Hisaab records every dividend distribution and pairs it with the applicable Sharia non-halal ratio. Investors can review unpurified amounts and log charity disbursements.

Implementation Rules
  • •
    Automatic & Manual Logging: Log historical distributions with exact payout dates, dividend-per-share values, and net amounts.
  • •
    Direct Purification Pairing: Every rupee received in dividends is checked against the holding’s non-permissible ratio to compute exact charity obligations.

Notice & Disclaimer

Hisaab provides calculation and tracking tools for informational and personal administrative purposes only. Results are determined by user inputs and chosen standards. Hisaab does not provide investment advice or religious rulings (fatwas). Consult a qualified Islamic financial scholar for personalized guidance.