What can I do with the Accumulated Interest on my Provident Fund?
Question
I need advice from you on a matter, which is disturbing me. You must be well aware that provident fund is a scheme by the Government of India by which a fixed percentage is deducted from the salary and a fixed percentage added by the company and kept in an account, which accumulates and is then received back after retirement. Since this is by legislation and according to factory act these deduction are compulsory and are made every month. But the disturbing factor is interest is added on the accumulated money by the provident fund commission. This I came to know only recently after which I had discussion regarding this with my Muslim brothers (colleagues). I then consulted my HRD Manager for getting the interest cancelled on the amount accumulated as provident fund, but he expressed helplessness since it was through legislation and he can do nothing on it though he promised to look into the matter further. He suggested in donating the money to some charitable institution. Our concerns are Is it legal in Islam to donate the above said amount to any Muslim organization? If it cannot be donated then how can we dispose this amount? We are very concerned about this and Insha'Allah , we anticipate an early advice from you as per the Shari`ah and the Qur'an.
Answer
It pleasures me greatly that in times of such general indifference toward the directives of the Shari`ah , there are people whose hearts and minds are still quite concerned about living a life that is in consonance with the directives of the Qur'an and the Sunnah , as much as possible. The Shari`ah has clearly prohibited taking interest on deferred payments. Therefore, in my opinion, as you have also implied, it would not be allowed for you to utilize the accumulated interest on your provident fund on yourself. The best utility of the funds so received, as your colleagues have also advised you, would be to give them away to some one else - an individual or an institution - to fulfill their needs. This is so because the amount so accumulated is interest for you, whereas for the individual or the institute to whom you give away this money, it is a donation. Moreover, it is not even necessary that the individual or the institute be informed of the source of these funds. On the other hand, it would be more prudent that the source of these funds is not mentioned. However, some individuals and institutes may want to know the exact source of these funds and subsequently may refuse to take the amount. This refusal is a personal preference of the individuals concerned. It does not, however, prohibit someone else from taking this amount. To understand the issue more thoroughly, consider the fact that Islam has actually prohibited taking interest on deferred payments because it holds such gains to be without justified grounds. In other words, Islam holds interest to be unjustified and a wrong inflicted on the person from whom interest is being charged. To undo this wrong, as a show of repentance and correction, the most appropriate act would be to return the amount to the person from whom this amount was originally charged. Nevertheless, the modern day interest-based transactions are so complex in their nature that it has become impossible for an individual to determine the exact individual or institution, which was wronged. In such a situation, a substitute may be to give away this money to any other individual or institute and thereby utilize the money in the general good of the society. Thus, the answer to the first question, in my opinion, is "yes" and, therefore, the second question does not arise. 30 th August 1999 Answer published by Moiz Amjad
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