Question
How can I convert haram money to halal?
Answer:
ﺑﺴﻢ اﷲ اﻟﺮﺣﻤﻦ اﻟﺮﺣﯿﻢ
In the name of Allah, the Most Gracious, the Most Merciful
Haram money must be returned to its original owner. If the original owner cannot be located, then the haram money should be given as charity to a poor person who is eligible to receive zakah without the intention of seeking reward, rather he will intend that he is giving it in order to absolve himself of its responsibility.
Nevertheless, if the poor person decides to give the money back to him after he was made the owner through sadaqah (charity) that was given to him without the intention of reward, then the money will become halal for him.
Raddul Muhtar: v. 9, p. 553 (Maktaba Imdadia)
Raddul Muhtar: v. 3, p. 293 (Maktaba Imdadia)
Aap Kay Masaail Aur Unkaa Hal: v. 7, p. 322 (Maktaba Ludhyanawi)
Only Allah knows best
Written by Maulana Mohammad Ahsan Osmani
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham