Home » Hanafi Fiqh » Askimam.org » An amount is deducted from our pay to be added in a fund called the Graduaty Provident Fund (GPF). At the end of the year a profit is given on the total amount deducted during that year

An amount is deducted from our pay to be added in a fund called the Graduaty Provident Fund (GPF). At the end of the year a profit is given on the total amount deducted during that year

I have an employment in Pakistan. According to Government rules, every month, an amount is deducted from our pay to be added in a fund called the Graduaty Provident Fund (GPF). At the end of the year a profit is given on the total amount deducted during that year. This profit is termed as interest, but the interest rate is different every year.
The next year, monthly amounts are added to the previous years amount , and interest is given on the total amount which comprises of the total from the current year and the total profit from the previous year.

There is no way to draw that amount from the fund and invest it yourself.
Is this money halal???

According to some it is the responsibility of the Govt to invest in the right business.  Can i use this money for myself? Can i use this money to pay Govt taxes?

There is no other investment  for employees. This is the only investment for us. If we dont take profit then we are only left with the sum of the monthly amounts which is not a lot.

Answer

If the GPF (Gratuity Provident Fund) distributed a profit every year, that is permissible. If it distributed interest, it is not permissible.

It is important to determine whether the amount distributed is profit or interest. If it is interest, then that money could be used to pay the government taxes.

and Allah Ta’ala Knows Best

Mufti Ebrahim Desai

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This answer was collected from Askimam.org, which is operated under the supervision of Mufti Ebrahim Desai from South Africa.

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