The discovery is a process for preparation of pharmaceutical grade byproducts Iron Aqueous Aluminum Chloride Solution, as a waste stream in Friedel-Cralt & similar reactions to give truly "eco-friendly" process. The process consists of' following steps. (a) The waste stream from Friedel-Craft reaction containing Aqueous Aluminum Chloride, Hydrochloric Acid and other organic impurities is treated with Sulfuric Acid to obtain Aluminum Sulphate Solution. (b) This solution is further treated with organic Sulphates to obtain a solution "A" (c) This solution "A" is cooled to below 20°C and pure crystals o1-double salt are centrifuged & washed whereby Hydrochloric Acid & other impurities are carried into mother liquors (Ml,-I). (d) The mother liquors (ML-1) are evaporated and resultant residue is recycled. (e) The washed crystals of double salt alter dissolving in water are further treated with alkaline gas or solutions to precipitate Aluminum I lvdroxide, which is filtered, washed with water & dried. (f) The filtered mother liquors (ML-II) from (e) above after evaporation are recycled to process.