Gold ETF Option

With the current happenings in the gold market, appreciate if you could share your views and advice on possibility of investing in gold EFT's as part of the portfolio.

Investing in gold ETF is not permissible in shariah. Buying and selling of gold ETF is buying and selling the securities and not physical gold. Gold is liquid as money and you cannot buy and sell money and any benefit derived will be RIBA (interest). Gold in good days was money and was bartered against other commodities & services, hence such ETFs are disallowed, and if anyone has approved, it needs to be scrutinized and investors should be protected from such a grave sin. Even jewelry that is used attracts Zakat, in Islam gold is money.

Lending Money to a Gambler

A known gambler asks for some money claiming that he has to pay a council tax bill otherwise it will be doubled with a fine. Although he is a know gambler he has never asked me as I am his friends daughter.He said he was desperate. My brother told me not to lend him money as he was lying and I will never see it again. I decided to give him the benefit of the doubt about the whole council tax bill story even though there was a doubt in my mind as to whether he had actually gambled his wage away and was not taking my money to hand over to his wife as his ''wage''. Anyway, I gave him the money and he promised to pay it back within two weeks...did I do the right thing in giving him the benefit of the doubt and believing him or have I just encouraged a gambler in his addiction and will Allah not be pleased with what I intended was to get him out a situation from getting worse with the council tax? What happens if he comes back for more money as he is a well known gambler in the community?

As per the opinion of shariah scholars, it is not advisable to lend money to a regular gambler. Islam completely prohibits gambling. Under these circumstances we should not encourage activities that would lead to gunah. Allah knows best.

Lending Money to Non-Muslims who are in Need

Is it permitted in Islam to lend money to Non-Muslims who are in need of money? They might use it for things that are not permitted in Islam. Is this ok?

It is permissible to lend money to Non-Muslims on condition that the amount is not used for wrong purpose If the lender Muslim is aware of the misuse of money for wrong reasons than it is a sin which is prohibited as Allah Almighty says: Help each other in righteousness and piety, and do not help each other in sin and aggression. Fear Allah. Surely, Allah is severe at punishment. (Surah Al Maedah-2)

Returning the Loan Money with Increased Amount

I want to borrow money from a person working in my office for a period of six months. I will return the money with increased amount. Is it Jayez (permissible)?

It is lawful to pay more than the borrowed money provided there is no condition of extra amount and the creditor does not desire to receive an extra amount, rather it is good and proven by Hadith. However, at the time of paying the debt one should say like this, here is your capital and this extra amount is from my side. This not Riba, there was no precondition of extra payment.

As a Son, is it Obligatory to Pay Off his Father’s Loans and Debts

My father is a business man. Few years back, a person cheated him and he incurred heavy loss. After that, there was no business and in order to run the existing business and get new business and to cover our educational/family expenses, he took loans from relatives, banks and various financial institutions with an intention to pay it back soon. But, he faced more losses again and he sold our house to pay off part of the debts. He still has loans/debts which he is trying very hard to pay off. He has paid so much of interest till today, for the loans he has taken. He regrets for it and prays to Allah to forgive him and works very hard to pay off his debts soon. He has gone old and gets tired soon. He is running the business just to pay off his debts. He does not have money or property which he can use to pay off his debts and close his business. If he closes his business and does not pay the loans/debts which he took and informs everyone that he lost everything in business and has nothing to pay back, will he be questioned by the Almighty Allah for not paying it off? As a son, am I obliged to pay off his loans/debts?

Shariah has emphasized on paying ones debts. Consider the following hadith:
Abu Sa’eed (RA) said, “I heard the Messenger of Allah (SAWS) saying, “I seek refuge from disbelief and debt.” A man said, “Oh messenger of Allah do you equate disbelief with debt?” He replied “Yes.” Ibn Umar (RA) narrates that the Prophet (SAWS) said, “A debt is the flag of Allah on the land; when he wishes to disgrace a slave then he places it on his neck. Uqbah bin ‘Amir (RA) narrates that he heard the Prophet (SAWS) saying, “Do not instil fear in your hearts after its security!” They said, “What is that oh Messenger of Allah?” He said, “A debt.”
If your father has exhausted all possible avenues to pay his debts, he should discuss his difficulties with his creditors. It is possible his creditors may absolve him from the full debt. That will bring some relief to your father. Shariah has also encouraged the creditors to be lenient to their debtors. Abu Mas’ud (RA) said that the Prophet (SAWS) said, “A man from the people before you was reckoned with and no good was found from him except that he used to mix with the people and being a rich man, would order his servants that they overlook the one who was poor in paying his debts.  Abu Hurayrah (RA) said that the Messenger of Allah (SAWS) said, “Whoever is lenient upon a poor man Allah Ta’ala will be lenient with him in this world and the hereafter”
In principle, though you are not legally responsible for your father’s debts. Nobody can claim and right over you for your father in paying of his debts. However if you assist your father in paying of his debts, that will be an act of great virtue.

Is Repaying a Loan at Rate of Inflation Halal or considered Interest (Riba)

I stay in a western country and soon I will get admitted to a university this year. The state government has stopped giving out grants for students but they do give loan, which is interest free but is has to be paid back at the rate of inflation. In real terms the repayment I make is not worth more than I borrowed as you can only buy the same amount of goods with it. Although in physical terms I would be paying back more. For example in 2010 I borrowed 100 pounds which could buy me say a week’s food. Rate of inflation is 2%. In 2011 although I repay 102 pounds (due to inflation) but I can still only buy the same amount of food with it. I would like to know if this is Halal for me or is it same as paying interest (Riba)?

Yes, it will be interest (Riba). Any loan that is borrowed before inflation must be repaid with the same amount, regardless of the effect of inflation upon it. In your case, since the repayment of your loan was index-linked, you, the borrower, will be harmed. Therefore, this transaction is tantamount to Riba. Any amount paid in excess of loan amount is Riba.

Can I take money from a friend, knowing that it is not Halal

I wanted to know can I take money from a friend, knowing that it is not. Can I eat food from a friend that purchases his goods with Haram money? If a friend gives me an asset which is brought with Haram money, can I accept it?

In principle, if a Muslim person’s major source of income is from Haram, then it is not permissible to have any dealings with such a person in relation to his income. It is not permissible to accept a gift from him whether it is in cash or kind. It is also not permissible to purchase an asset from him. Our object is to protect our deen.

Have loan, is Zakat payable or not

I am govt. employee I have purchased House on loan. I am having about Rs. 10 lakhs loan. I am also having about 4 lakhs rupees worth gold. As my loan is far too more than my wealth, in this situation, do I have to pay Zakat or not, kindly clarify.

When you have gold worth of 4 lakhs rupees, you will have to pay Zakat after passing one lunar year. What you should do is deduct the amount of one year instalment of the total loan from the 4 lakhs and pay the Zakat of remaining amount. For example say you have to pay the instalment of Rupees 1 lac a year then you should deduct 1 lac from 4 lakh you will have to pay Zakat of the remaining 3 lacs. Allah knows the best

Short Selling in Islam

Why short Selling is not allowed?

Shariah does not permit Short-Selling. The short selling is defined as selling the goods which are not in the possession of the seller. This activity in the market is used to create artificial supply and manipulation of price. It is a pure speculation. Islam does not permit any manipulation and interference of price mechanism. Even our beloved Prophet (saw) refused to interfere in the price mechanism of the market forces and said that it is prohibited on you to sell anything that is not in your possession. 

The condition of paying loan with equivalent value of gold in future

If Mr X is asking for a loan of Rs 30000 from me & I am putting the condition that I am giving you this money which is equivalent to 10 Grams of Gold price & whenever you will return this money to me the amount should be roughly equivalent to 10 Grams of gold. Is this type of lending allowed in Islam?

This type of condition in lending money is not allowed in Islam because it is in principle the repayment of a loan should be similar to the loan.  In the mentioned case, since you loan 'Mr X' Rs 30000 rupees, 'Mr X' has to repay you the same amount in rupees. It is not correct that the money be paid or taken back in equivalent up and down value of 10 Grams of gold at the time of paying. If you would give him 10 grams of Gold than you are eligible to receive exact 10 grams of gold of same quality not a gram less or more or it will tend to be Riba (interest).

Changing the Buyer of a Product already Sold

I have sold my car at Rs. 3, 50,000 but the buyer fails to pay in scheduled time. My question is can I sell it to someone else now?

If the buyer seeks some more time and it is not harmful for you to give him some more time, it shall be counted as your good manner and gesture. However, if you feel that the buyer is delaying without any reason, than you have the right to cancel the dealing and sell it to someone else. If you have taken some price as advance you must return it back to him.

Investing in Forex

Is Forex Trading is HALAL or NOT?

The exchange of one country's currency with that of the other with difference is lawful since they are different species, however one should not that the trading should be of physical in nature i.e. it should be exchanged hand in hand and it should not be derivative contract. 

Investing in Mutual Funds

Is it permissible in Islam to invest in mutual funds?

It is allowed to invest in such mutual funds which invest the money of shareholders in companies which deal only in halal business and if the shares bought are certified as Shariah compliant by a credentialed Shariah board. And the trading of the shares done the mutual fund is in accordance to Shariah. The investments in conventional Mutual fund is not permitted as they are not at all Shariah compliant  

Investing in Share Market

Is it allowed to make entry in share market according to Islam? Please explain.

It is allowed to purchase the shares of any company for business or investment with some stipulated conditions laid by the Shariah board. But the Satta (fixing/gambling) which is nowadays common in share market is disallowed and haram. This is not intended to purchase share and own it, neither one takes possession of the purchased items, but only oral or contractual transaction takes place without taking the possession of the asset and only the profit or the losses are settled This is gambling/ speculation thus unlawful.

Investment & Trading of Shares

I would like to know if Trading in Shares (especially doing Intra-Day i.e. Purchasing and selling the same day) is it Halal? If we see the other way that a hawker purchases onion in the morning with an intention to sell it during the day. Can't the same principal get applied to Intra-day share trading

It is Halal to buy the shares of a lawful company. However, until the purchased shares are in possession and are deliverable it is not lawful to sell it to others. The shares are received into ones D-mat account would be treated as possession. Day’s trading or so called intraday trading is not permissible at all since it is only contractual transaction and no actual delivery is bought or sold hence its speculation and gambling and it is haram. Coming to your hawker’s point, the onions bought and sold on the same day is backed by the delivery that is sold in the market on the same day so there is no harm in it according to Islam. There is transfer of goods or commodity from one hand to another.

Profit from money meant for Safe-Keeping

If somebody entrusts you with some money, for example, 1000 they have not lent the money to you but have just given it to you for safe keeping. Can I Invest that money in Halal finance, and benefit from the profits? Or does the money earned through profit have to be given to the rightful owner? Can you please advice?

You cannot invest the money that is entrusted to you. The duty of trustee is to safeguard the money. However, if anyone invests it anywhere and gains some profit, then he has to return all amount (capital and profit both) to the original owner.

Purchasing on Instalments

Is it permissible to take any items on instalments and paying more money to that item? Because it is not possible for me to pay the whole amount at a time, please reply.

It is permissible to purchase an item on instalment with additional price provided the price is fixed at the time of transaction and nothing extra is paid as interest. 

Real Estate Commission from Alcohol Company

We are into the business of Real Estate. Can we give service to Alcohol Beverage Company? Would the commission that we get from them be halal as we are just giving the real estate services?

You are allowed to provide the services if you do not tell lie and deceive and the commission amount is already agreed upon. According to one opinion, it is allowable to provide the service for an alcohol beverage company too and the income will be lawful, but according to another opinion, it is better to avoid. However, in any case the income will not be termed haram, but it will not be perfectly pure too one should refrain and look for other option even though it may be less profitable.

Partnership with Non-Muslims

I want to start a new business, which involves chemical trading, in partnership with a non-Muslim. Both of us are going to invest equal amounts of money. My question is that is it halal for me to do a business with a non-Muslim partner.

You can make him your partner to the extent of business only. Follow Islamic rules in other religious and social affairs. Furthermore, settle down the dealings of profit and loss in business partnership clearly. However, make it necessary from now that neither you nor your friend would execute any interest based dealing and no speculative activity is carried out.

Is It Permissible to Carry Credit Card

What are Islamic laws concerning use of credit card? If I have credit card and I pay the whole amount at the end of the month, it does not incur any interest, is it permissible to carry credit card?

Buying credit card and using it is lawful in itself provided there is an already open account from where the creditor can receive his debt. And, if there is no balance in the account to pay to the creditor then the credit card should be used keeping this thing in mind that the issued bills are paid within their prescribe time so that they incur no Interest payments, since paying interest on credit is Haram. (Darul Ifta, Darul Uloom Deoband)

Interest on Keeping Gold Items with a Jeweller

If I kept some gold items to a jeweller for a certain period he charges me interest. In that case can I give my bank interest amount to release my gold items or it is Halal to keep the gold items to a jeweller in case of urgent need.

It is unlawful to pay the interest of the jeweller with the bank interest; rather it is wajib to spend the bank interest on poor and needy ones. In taking loan by giving gold on security, one will have to give interest while taking and giving interest is Haram; hence you should not do so.

Can Interest Money be Donated without the Intention of any Reward

From Gulf I transfer my earnings to a savings account in an Indian Bank. Every six months the bank adds interest money to my account. I heard that interest money can be donated without the intention of any reward. If this is right, please advise me as to whom I can donate this interest money to. Can it be given to needy relatives of mine?

As a general rule, no Muslim by his free choice should deposit his money in an interest-bearing account. You must immediately transfer your money to a non-interest-bearing account. It is incumbent upon you to give the interest money from the bank as charity to the poor who are entitled to receive Zakaat without the intention of receiving reward. This charity is meant only for disposing of unclean and unlawful money and to relieve oneself from the burden of an ill-gotten gain.
But it should be remembered that this amount is unclean only for the person who has received it as interest. The poor persons who get it from him as charity can use this amount for their personal benefits. You may give the interest money to your relatives who are entitled to receive Zakaat.

Working as a Commission Agent

Is working as a commission agent for any Halal trade is considered Halal in Islam?

If the matter is as you describe, then this work is permissible and there is nothing wrong with taking this commission in return for your efforts in finding customers.  

Selling Goods Before Their Possession

I import goods for trade, then I sell them before they arrive and I receive them. What is the ruling on that?

Selling goods before they arrive is not permissible, because the Prophet (PBUH) forbade selling goods in the place where they were bought, until the merchants have taken them to their own place. So it is essential first to take possession of them, then you can sell them. As for selling them when they are in another country, and you do not know whether they will arrive in good condition or not, this is not permissible. 

Ruling of Mudarabah

In Mudarabah contract under Islamic Finance, one party provides investment he is called the Investor (rab-ul-maal) while the other gives technical & management expertise he is called the manager or entrepreneur (Muzarib). Profit if any, is divided between both the parties on prefixed basis while loss, if any, is only borne by the investor. Is it not exploitation of the investor and does Islam allow this?

The ruling of mudarabah is that one person invests and the second one does labour & management and the profits are distributed as per the agreed upon terms. In case of loss, it is solely borne by the investors  since the Muzarib is contracted to do the labour and use his skills as the contribution of capital and his reputation and time is also at stake hence the Muzarib will not bear any tangible or monetary losses. If the mudarabah is carried out accordingly, it is lawful according to Shariah and there is no exploitation of the investor.

Investing in Stock Market

Is Investing in Stock Market (buying shares) HALAL or HARAAM?

Yes, Buying the Shares from Shariah board approved Company is permissible (Halal). There are few stipulated conditions one needs to adhere. For details of Shariah approved stock visit the website www.pragmaticwealth.net. Allah Knows Best

Interest on Fixed Deposit

Some people say that fixed deposit interest money received from the banks can be used for the purpose of constructing building toilet bathroom and cleaning of nail and garbage (kura) around our home.

Some Ulama have allowed using interest money of fixed deposit for building toilet and other public welfare works, but in our opinion is that it is not lawful to spend it in the said heads, toilets bathroom others things are of utility and benefit is derived out of it, and according to the law the interest money cannot be used for personal or social wants, it is rather far too better in our opinion to give it in charity to the very needy poor without the intention of reward.

Purchasing on Instalments

Is it permissible to take any items on instalments and paying more money to that item? Because it is not possible for me to pay the whole amount at a time, please reply.

It is permissible to purchase an item on instalment with additional price provided the price is fixed at the time of transaction.

Providing Services to the Companies Carrying Haram Business

We are into the business of Real Estate. Can we give service for Alcohol beverage company Get them a house the commission what we get from them is it halal we are just giving the real estate services?

You are allowed to provide the services if you do not tell lie and deceive and the commission amount is already agreed upon. According to one opinion, it is allowable to provide the service for an alcohol beverage company too and the income will be lawful, but according to another opinion, it is better to avoid. However, in any case the income will not be termed haram, but it will not be perfectly pure too.

Payment off the Debt with Lottery Money

I know that lottery money is haram. But is it permissible to use it to pay off my debts to the bank and my siblings debts to the bank, so long as I am careful not to use it for anything else?

The lottery is a kind of gambling, and money acquired by means of it is haram wealth which must be gotten rid of by spending it on the poor and needy and other charitable causes. It is not permissible for the individual to benefit from it himself, and he also has to repent to Allah, may He be exalted, from what he has done.  Allah, may He be exalted, says (interpretation of the meaning): “O you who believe! Intoxicants (all kinds of alcoholic drinks), and gambling, and Al Ansaab (stone altars for sacrifices to idols etc), and Al Azlaam (arrows for seeking luck or decision) are an abomination of Shaytaans (Satans) handiwork. So avoid (strictly all) that (abomination) in order that you may be successful. Shaytaan (Satan) wants only to excite enmity and hatred between you with intoxicants (alcoholic drinks) and gambling, and hinder you from the remembrance of Allaah and from As Salaah (the prayer). So, will you not then abstain? (Al-Maaidah 5:90-91). Based on that, it is permissible to give it to your siblings so that they may benefit from it by paying off their debts or buying what they need if they are poor.  If you do not have enough money to pay off your debt, then it seems that it is permissible to you to take some of this money to pay them off. Ibn al-Qayyim (may Allah have mercy on him) spoke in detail about the issue of getting rid of haraam wealth, and he stated that the way to get rid of this wealth and complete one's repentance can only be by giving it in charity, but if he is in need of it, he may take as much as he needs, and give the rest in charity. (Zaad al-Maaad, 5/778) Shaykh al-Islam Ibn Taymiyah (may Allah have mercy on him) said: If this prostitute and this wine celler repent, and they are poor, it is permissible for some of this money to be given to them, as much as they need. Af he is able to engage trade or a profession such as weaving or spinning, he should be given enough to form capital for him. End quote from Majmooal-Fataawa (29/308)

Investment in Life Insurance Policy

Can we invest money on Life Insurance Corporation Policy for future securities and are the returns from that policy Halal money?

There are two main types of life insurance: Term policy and endowment policy. The term policy involves the payment by the insured of modest premiums over an agreed period, say, 20 years, in return for the benefit of his family receiving an agreed large sum of money in the case of his death during that period. If the insured remains alive at the end of the policy, it lapses and he gets nothing. What the insured actually buys with his payments is the peace of mind he gets from the knowledge that should he die, his dependants will have a large sum of money to see them through life until, say, his young children came of age and were able to look after themselves. The endowment policy involves the payment of larger premiums which are invested by the insurance company. When the policy matures, the insured receives the sum assured as well as any share of profits to which he may be entitled under the terms of investment made on his behalf by the insurance company. Both types are permissible from the Islamic point of view, as explained by Professor Al-Zarqa, provided that the insured makes sure that the insurance company invests in legitimate business. If the insurance company invests in what Islam forbids, then taking out its policies becomes forbidden as a result. And Allah Knows Best

Zakat On Advance Payment Amount

I have purchased a flat for which I have made full payment to the builder; the flat will be given to me after 5 years. Should I pay the Zakat for the amount I purchased the flat this year or I should pay the Zakat after getting the flat?

If Zakat is fardh (obligatory) upon you, then 2.5% Zakat of that amount is payable for every year, till you will get possession of the purchased flat. And after getting possession you will have to pay Zakat on its market value only if you purchased it with the intention of investment.

Can the Person Who Has Taken Loans Go For Hajj

A person who is an Indian Government employee and he has taken loans from Banks several times and now he wants to go on Haj. My question is that; is Haj obligatory for him with this loan? Can perform Hajj in this situation?

Being able financially and physically, one of conditions that is mandatory to become Hajj obligatory on adult and sound mind Muslim. Yet who has taken loan, can go on Hajj even if he has a loan as long as he is current on his monthly payments to his lender. If he has fallen behind on his monthly payments then he should seek the permission of his lender before going on Hajj. If he goes on Hajj while behind on his payments and without his lender's permission his obligation of Hajj then it will be fulfilled, although it would be Makruh. As an extra precaution it would be better for him to inform him inheritors of his debts and write a bequest stating all his debts. If one is going on a Nafl Hajj then it's more important for him to use that money to pay off his debts rather than go on Nafl Hajj.

Online business by creating Website

I am about start an online business I will just have to make a website and get it registered with Google or yahoo and then people clicking on my page will profit me. Should I go with this business?

If you design your website and register it with Google or yahoo and then put their advertisements on it so whenever anyone will click the advertisement you will get its benefit, the companies will give you something as rent. This will be allowed provided that the advertisements given on your website are not of any Haram business and do not contain anything unlawful.

Children Nourished With Haram Money By Parents

There are children out there whose parents, for example, are dealing in riba and who are fed with meat attained through this money. What should the children do in this case?

Prophet (Sallallaahu Alayhi Wasallam) said, ‘A person who was nourished with Haraam will not enter Jannah.’ And in the case of the children, the parents are responsible to sustain them with Halal and pure earnings. Children will not be responsible.

To Accept Unlawful Money For Performing Hajj Or Umrah

If a person won the lottery, than he wants to offer me money to perform Hajj or Umrah, is it allowed to accept it?

If that person is giving you the same money he got from lottery, then it is not allowed to accept it and go for Hajj or Umrah; since the money is unlawful. But, if he gives you any some lawful money, then you should accept it.

Neeyat Of Zakat On Lent Money

I gave some money to my friend when he is in need. At that time I didn't do the neeyat of anything. Now he is not in a position to return that amount. Can I neeyat now that I spend this money as a Zakat.

It is not enough to make niyyat (intention) of Zakat with money that you lent your friend.  But if you want to do a favor in this regard, the permissible way is that your friend should borrow the same amount from any third person and he return it to you and after taking it in your possession you should make niyyat of Zakat and give it your friend if he eligible to receive Zakat then he return to third person from whom he borrowed second time to return you. And there is no wrong as par Shariah.

Obligatory Of Zakat In Wives’ Property

I gave my wife a Gold chain from the money of her maher. Shall I have to pay Zakat on that Chain? Or it is the responsibility of my wife because it is her property now?

If the wife owns nisab with required conditions, the responsibility of paying Zakat as well would lie on her and she will have to pay the Zakat though she does so by selling jewels. As husband is not responsible of her salah, he is not responsible of her Zakat as well. Yes, if husband pays the Zakat happily for her with her permission, the Zakat will be valid and she would be free from obligation.

Do you have question?