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Is it permissible to invest in PPF, home loan, LIC, mutual funds, and NSC according to Islamic law?

Answered as per Hanafi Fiqh by Darulifta-Deoband.com
Assalamualaikum Iam working in a Company In INDIA. Mashaallah iam getting a good Salary. Income Tax Deduction is very high on my salary. Can i open PPF account , Can Take Home Loan(Iam residing on Rent here but in Delhi my father is having House)or can Invest in LIC,Mutual Fund , NSC etc. But all are giving certain percentage of amount after stipulated time period.So is it jayaz as per shariah to invest in these things.In home loan i have to pay the interest to the bank against the amount i loaned for taking home. Please Reply as soon as possible. Jazakallah Khair

Answer

(Fatwa: 1939/1805=D/1429)

(a) You should explain PPF account.

(b) One has to pay interest when he takes loan which is unlawful and haram. You must avoid the curse of interest if you feel no trouble living in a rented room and save money for a house.

(c) LIC involves interest and gambling and both are unlawful. According to Hadith, both bring loss at the long run.

(d) If money through mutual fund is invested in business and you share in the benefit and loss of your invested money as per the average, then you can invest your money in it. But, if the benefit is fixed to be received ultimately, then it is not allowed to partake in it.

(e) You should write details about NSC and submit the question again.

Allah (Subhana Wa Ta’ala) knows Best

Darul Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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