MoneyMatters – All About Riba QA 6

Mansoor Danish


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Hola Hola. Cantonese purchasing something on installments halaal in Islam? And if yes, what are the conditions, you can buy mobile business? I don't know what you mean by buying business in the brackets, you mentioned business, buying a car or a house. Yes, installment purchases are allowed. And you can have a separate amount for both the transactions in the sense. As an owner, I can tell you, if you buy this mobile from me right now and you pay me cash for cash, I'm going to charge you $1,000. But if you're going to pay to me in EMI, then my price for this will be 12 $100.

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And you can pay to me in 12 installments. So I have a separate price as an owner of the product. Remember, I'm stressing on the key word, I am the owner of the product. And as an owner of the product, I can charge you differently if you pay on the spot, or if you pay me later.

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If you pay me on the spot and basically offering you a cash discount, if you delay and pay then I'm charging you 12 $100 over 12 months.

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This seems okay. However,

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if I go to buy a mobile and the company says, Well, we have the mobile with us, we are ready to sell this mobile to you, you have to pay us $1,000 you say I don't have $1,000 there's no problem, we have someone who will help you out. And this is a finance company which comes in and says no problem, we'll pay for you $1,000 to the company, you pay us back 12 $100 this becomes rebar because what's happened is the price of the product which has been transacted is $1,000. The company has received $1,000. In your case, what's happening is the finance company is funding in your place and is charging you $200 additional

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and they are not the owner of the product, they are basically financing your monetary requirement, this becomes clearly a case of rubber.

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So installments permissible in Islam provided the one with whom you're transacting is a the owner of the product. And the as an owner of the product, I can charge any price I want. So if I shall come to me to buy a mobile, I can tell Ayesha that Listen, I show you on my sister. So for you, I'll offer this at $800. And let's say sada comes to me. And I tell Sarah that well, Sarah, you know, I'm quite professional in my dealings, I have no relationship with you, you pay me $1,000, I'm the owner of the product, I'm free to charge whatever price I want. The buyer has a choice whether he or she wants to buy or not.

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So I hope this is clear to you. I've tried to give different situations so that the

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point becomes clear to you. In cases of finance companies moving into the scene, that's when the rubber issue starts. Okay. The other case could be that I am the owner of a mobile, I sell it to you for $1,000. And I tell you no problem. You don't have $1,000 you don't have to worry take this mobile, the bill is made $4,000 and then a separate contract is made whereby you pay me back 12 $100 over 12 months, this again becomes Riba even though I'm the owner, but what I've done is in my records, I have shown the transaction act $1,000 and I am showing that you owe me $1,000 but against that 1000 you will be paying me back 12 $100 the question explain how can we invest our money in a

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halal way? How can we work towards an Islamic model of managing our finances? What is the Islamic money or wealth model? All of this cannot be discussed in an audio note it calls for proper lecture discussions, etc.

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The most

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obvious answers to all of this would be how can we invest our money in the hallway, you identify whatever other permissible means which are there. For example, you can participate into sharing of losses and profits, you have to be involved in risk taking any investments which entails taking of risks, as well as

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losing out money and earning profits. And the underlying instruments where you are investing are all halaal you're following the business models the proper sale conduct is being done the proper contract as per Sharia norms are being followed. I mean, everything in entirety, then there is nothing wrong with it.

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This is extremely broad base for me to discuss in WhatsApp for answering again, the question of the Islamic model of managing our finances. This

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As far as managing finances are concerned, there isn't an Islamic model per se. According to me, one of the best things that one can do with the money is whenever you earn a salary, serve yourself first, what we do is as soon as we get a salary, we first start setting aside money for our expenses, then we set aside money for our emergency. And then we set aside whatever is left for ourselves. And by that time, the amount is so negligible or so small, that we feel absolutely disinterested to even save that money. I mean, what's the point saving 5000 10,000 rupees, it has absolutely no value nowadays. What I suggest or recommend is always learn to serve yourself first.

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Technically, you should always strive to save 25% of your salary every month. If you do that, by the end of the year, you would have saved at least three months of your salary, can you imagine that? It means you've worked for 12 months, and you have three months salary in your hand in your kitty. So technically, you work for 12 months, but you have 15 months money with you. Do you understand the calculation, which I'm trying to present to you. So this is what you should try and do. But everyone cannot save 25% immediately because of the commitments that they have. So you should always start off with let's say 10% every month 10% of the salary is being set aside. So over the next 10 months,

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you've already set aside a one month full salary. So by the end of the year, which is 12 months, you would be having 13 months salary of which of which you would have used up 12 months salary in meeting expenses, or one month of salary is your entire savings, which is totally your money. Okay, so I hope you understand the math that I'm trying to explain here. Try to save 10% at least to start off with, grow it to 15 grow it to 20 eventually, you should reach 25%. So when you serve yourself first, as soon as my salary hits the account, I serve myself first, I keep another parallel account where I immediately transfer all the money. Now what is left with me is where I plan my expenses, I

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plan the money which I have to spend in going out with family for outings and going to hotels and restaurants and eating out whatever it is okay, doing well nowadays you don't have window shopping nowadays you have mobile shopping, you know, it's as good as that people go to Amazon and they keep scrolling down. We all do that isn't it and we end up buying things which we don't need. So once you have more control over your savings you serving yourself. Now I know my limitations within this 90% I need to manage. Maybe I have loans which I have taken in the days of ignorance. So I might have to pay for the loans I might have to pay for the education expenses of my children. There may be some

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medical expenses, some emergency money, all of that is set aside from their own. But always serve yourself first, number one, number two,

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from whatever you're serving yourself first, you should also compulsorily take our charity, nothing happens when you pay charity except a lump. What's more Baraka in your wealth, if you want your money to grow, you must pay charity, this is the way this is the way it has always been the Prophet Sal Salah when he would talk to the Sahaba to pay or to invest in the sake of Allah, he would promise them huge rewards, some of the rewards can happen by money growing in this dunya. Some of them could happen through more Baraka in your wealth, which means you're able to meet all the expenses within the limited amount that you have, and still have a comfortable life. The third could

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be the Allah holds back the reward for the next life. Without I mean, that is the best. So do charity as well. So two most important things as far as managing your finances is, number one, serve yourself first. Number two, do charity. Number three, get rid of loans and never take any more loans in your life. And always learn to live within your means. I mean, if I can't afford to buy a house, I don't have to take a house because I know that

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Mrs. Ayesha and Mr. Abdulkadir who have just shifted, they have all the lovely, you know, wealth and material of dystonia, so I need to compete with them. And I need to buy similar kind of facilities. For myself, I shouldn't be doing that. I should not be competing with people over materialistic things. So always try and live within your means. That's one of the best ways to become rich and grow your wealth, and Allah knows best and

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taxation allowed in Islam, is it different from Zakat? And the second part of the question is about

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some aspect of taxation work which involves dealing with interest based transaction what is the ruling on such a work? Okay, first and foremost is taxation in Chicago the same day are in St. Louis can be treated as a car to a man made system. The car is a concept which has been legislated by Allah subhanho wa Taala. So therefore there is no point comparing it to a

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manmade system which is in place, the man made system can always have

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lacunas will have lacunas and will be, will be susceptible to malafide, abuse etc. Not to say that laws legislated by Allah is free from people abusing it, people can abuse laws. And that is why there is an eventual accountability on the Day of Judgment. But the point here, let's stick to taxation and sacar. The totally different when you pay taxation or to the government, you're paying a tax for the services that you're using the benefits that you are being provided by the government, which is a

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the social state providing a lot of social services and security.

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You're paying certain taxation for it, then there is a kind of

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an understanding between the citizen and the government that the government allows you to practice your religion, it gives you certain benefits, features, facilities, good roads, etc. All of this has a cost and for this cause they charge tax. Okay.

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xhaka has very specific objectives. Zakat money cannot be used for making roads which you will be able to use your Zakat money is supposed to reach out to one of those eight categories of people who has been mentioned in the Quran

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in surah, October if I'm not mistaken, so there's a cat is meant for a specific category of people you can compare that to taxation. Now is taxation halaal.

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Look, the argument of is halaal are not being held comes to the point whether the tax money is being abused by the government. It can be abused by anybody.

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You get my point, it's not necessary that the Muslim state will not abuse it. And a non Muslim state will abuse it. It totally depends upon

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the leader and his morals. Okay, we know in history, many Muslim rulers and leaders who have abused the systems which were in place. So the issue of taxation being halal or haram, we don't have a proper concept of an Islamic governance system of collection. So I personally feel there isn't anything wrong in paying tax. If a scholar says it is haram, I wish to know what are the basis of it if there are somebody who can come and share with me a more scholarly argument I'm willing to listen to it inshallah, and perhaps even change my view. Now coming to the point of doing activities, which involves dealing with interest based transaction, I shared the fatwa of shift of money a couple of a

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few days back. Also in the session, I remember sharing this, that he was of the opinion that if you are doing the work of an accountant, then you don't qualify to get the same sin.

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Because your job is only to make sure that it conforms to the legal framework.

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This is a very tricky point.

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I'll tell you why this is tricky. It's tricky because

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many scholars have said this is haram. The job of an accountant is haram only on this basis.

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So you can clearly see there's a difference of opinion among scholars. My personal view is I find the opinion of shake that we use money more palatable. In the context where we live in his HDR. Remember, there is no concept of each tree has been a clear Quranic idea of these mentioned something where nothing is mentioned the views of the scholars can differ with one another. I prefer the fatwa shade Mufti Taqi Usmani simply on the grounds

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that the entire setup is such that you need accountants in the system, by saying all jobs of an accountant is haraam. We make ourself open to going to non Muslims for accounting for filing of returns. And then he keeps telling you and you know, he becomes the whisper of the shaitan because he will keep telling you take up this product. Take up this interest based fixed deposit, you'll save on taxes, take up this insurance. Now, you and me may have a higher level of taqwa to say no, this all the Muslim oma have the same level of taqwa they don't. So I personally feel that Muslim accountants are needed to guide the Muslims.

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And it's only when you are able to occupy positions like accountants, economist

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cetera, you're able to share

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the Islamic perspective. The problem is we don't have representations because we don't have qualified accountants, we don't have that many qualified economists. So, I am personally of the view that a field

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cannot outrightly be said to be haraam

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just on the basis of like, you know, the difference of opinion which I shared amongst the scholars, I know it's a little trickier, but up to Razak, my opinion is that you must try to build in a more Muslim clientele base and keep advising them because if you see them engaging in interest based transaction, you can keep coming back to them and telling them to stay away from it etc. So, what happens is you start enjoying good, right. And maybe if you are a very prominent accountant, you can and you have the power and you have a very strong standing, your views are respected by institutions and individuals, you can even advise people who are non Muslims who are engaging in interest, you

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can advise them against that, you know, so,

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I would go with the view of data as money on this

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is a question that paper currency leads to inflation, is that correct?

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There are many factors which lead to inflation, the questioner must know this, that paper currency is not the only reason for leading to inflation, one of the factor is of course, demand and supply, what is inflation understand inflation means a persistent rise in the price level of commodities, alright. So, inflation can be caused due to

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the demand and supply as well. So there is a demand for a certain good, the supply is less, it leads to a higher price. It's economics, pure economics, that could be one of the reasons for inflation, there can be other forms of inflation which can be born because of the interest aspect, the more a company takes loan, it has to pay interest. So what they do is they pass on the interest burden to the customers. So the price levels of the good rise again. So that's another factor which can contribute to inflation. And then there are other factors which control inflation also, they are called the cost push inflation, the demand pull inflation, the different factors, which I don't

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think can just be addressed on a chart, we probably need to have a session on economics in the future, inshallah, question that the pension or the GP fund that the salaried person gets from the government, if it's involved in crisis, what do we do about it? Whatever the salary that the government servants are getting monthly, is there any interest in it? Let's look at it this way. First and foremost, if it's a pension or a gap Fund, which you have been forced into by virtue of your employment, because you're working in a company, where as per the law of the land, certain amount of the money needs to be compulsorily set aside from your salary. This is not a voluntary

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scheme. It's being part of the systems in place. For example, in India, we have a system of provident fund. If you're working with a certain institution, which has got so many number of employees working for them, they have to compulsorily take out provident fund for them. This provident funny, this provident fund money may go into interest bearing securities. The ruling here is, if it is something which is voluntary, I should be very careful to identify whether the money is being invested in a halaal scheme or a forbidden scheme. If it's a forbidden scheme stay away. If it is a halaal scheme, you can invest. However, in a situation where you don't have control. The

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company takes it out from your salary as part of the law of the land and sets it aside against your name. And at the end of your working life, they pay it back to you double the amount or triple the amount, it doesn't matter to you, how did they get that money? It was not taken with your permission, it was just part of your employment deal.

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Even if it is from haraam sources, it's not haram for you anymore. You can use the money as an how you like it. Because this was not voluntary, it was forced upon you.

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And whether the government salary or the salary that the government servant gets, if he's engaging in a halaal job.

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Why would he get money being paid from interest because every job some way or the other adds to adding productivity mostly the government servants are not paid from interest. They are paid from taxes. Okay, the taxes which is collected is how you're paid your salary. So I don't think it is the interest which pays for the salary of the governments of