Answer
(Fatwa: 697/543/H=1431)
The word “Khuda” is similar to the word “Allah” in denoting the existence of Almighty Allah, hence it is allowed to use the word. Some Asma-e Husna (the Beautiful Names of Allah) are mentioned in the holy Quran not in hadith, while some are in ancient scriptures not in hadith too. And if any glorious name from the Asma-e Husna (the Beautiful Names of Allah) is applicable like the word of Allah, there is no doubt in its permissibility though it does not exist in the holy Quran and hadith. It is written in Fatawa Mahmoodia: a word which is not the sign of other religious communities one cannot be prevented to use it, such as Khuda, Ezad, Yazdan; these names are not the sign of any particular non-Muslim community rather they repeatedly occur in the works of Muslim scholars.” (Vol. 5, P 377, printed Meerut, old).
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband