What is the ruling in Islam regarding sale with deferred payment accompanied by an increase, and is that considered riba?

The questioner : Peace be upon you, and Allah's mercy and blessings.

The Shaykh : And upon you be peace, and Allah's mercy and blessings.

The questioner : What is the ruling in Islam regarding sale with deferred payment accompanied by an increase? And is that considered riba?

The Shaykh : First: I always say: It is not appropriate to direct a question to a person with such phrasing, namely "What is the ruling of Islam?" or "What is the ruling of the Shari'ah?" Because if you direct the question to a person saying "What is the ruling of Islam?" and then he errs in his answer, to whom is the error attributed? To Islam. But say: "What do you say about such and such?" or "What is your opinion?" or "What is the ruling of Islam in your opinion?" So you qualify it. As for making it absolute, no one speaks on behalf of Islam except according to what appears to him from it, and it may appear to a person that this is from Islam when it is not.
This is a point I wish people would not address a person with such a phrase.
As for sale with deferred payment, sale with deferred payment is permissible by the Qur'an, the Sunnah, and the consensus of the Muslims.
Allah the Exalted says: .
In the two Sahihs, from the hadith of Ibn 'Abbas (may Allah be pleased with them both), he said: .
What is the meaning of al-islaaf? Al-islaaf is that the buyer advances the price and the item sold is deferred. For example: A person comes to me who needs dirhams, and he is one of the farmers, so I say to him: I will give you one thousand riyals for five hundred sa' of wheat after one year. Is that permissible or not? It is permissible, as long as we have specified the term and defined the item sold with a precise description. In this case, will the buyer take it for a lower price or not? Stay with me, may Allah bless you.
I will repeat the example a second time.
Okay, a farmer came to me who needs dirhams, and he said: I want one thousand riyals, buy from me dates with it. So I said to him: There is no obstacle, this is one thousand riyals for five hundred sa' of wheat. If I give him the thousand for five hundred sa' of wheat, will my purchase be cheaper than the market or not?
The student: ... .

The Shaykh : Why? Because there is a term involved, because if I wanted to buy from the market with one thousand riyals cash, they would give me less than what I bought from the farmer. The farmer defers the item sold, and this is something that must be the case, meaning there must be a difference between the deferred price and the present price, or between the deferred item sold and the present item sold.
So if a man comes to me asking for a car, he says: How much do you sell the car for? I say: I sell the car for twenty thousand cash, and for twenty-five thousand deferred. He says: I want it deferred for twenty-five thousand. This is fine and there is no obstacle, because Allah the Exalted says: , and this does not contain riba, it does not contain gharar, and it does not contain ambiguity, because the buyer left me with a known price or an unknown price? Known. Does it contain riba? It does not contain riba, because I am free to sell the car for twenty-five, I sell it for twenty, I sell it for ten, I sell it for thirty, no one prevents me, so I sold it for twenty-five deferred, there is no obstacle.
Yes, if the man bought it from me for twenty and we wrote the contract, for twenty thousand and he left, then he came back to me the next day, and said: By Allah, my brother, I did not get twenty thousand riyals, give me a year and I will give you twenty-five riyals. Is that permissible or not?
This is not permissible, this is haram. Why? Because this man has established in his liability how much? Twenty thousand riyals in dirhams. So he came to me wanting to make the twenty into twenty-five with deferral. This is haram, because it is selling dirhams for dirhams with an increase, so it is riba al-fadl and riba al-nasi'ah. Unlike if I sold him the item, for I am free to sell it for twenty, for twenty-five, for thirty, for ten, no one prevents me, and there is no religious concern in it.
Therefore, the stronger position, without doubt, is that the prohibition of the Prophet (peace and blessings be upon him) of two sales in one sale applies exactly to the issue of 'inah. The evidence for this is apparent, because he prohibited two sales in one sale, and said: . So what is the issue of 'inah? Do you know it? Have you not read ...?
The issue of 'inah: That I sell a person an item for a deferred price, then I buy it from him for less than that in cash.
I will repeat it a second time.
That I sell an item for a deferred price, then I buy it from him for less than that in cash, meaning hand to hand.
A third time.
The students: It is understood.

The Shaykh : It is understood.
The example: I sold this man a car for twenty thousand to one year. What is established in his liability? Twenty thousand to one year is established. Then I went back to him and said: Come, sell me the car, I will give you cash dirhams. For how much? For fifteen.
This is 'inah, and it is haram. Why? Because it is a stratagem, a stratagem for riba. Instead of saying: Take fifteen thousand for twenty to one year, we bring the car in between and say: Take the car for twenty thousand to one year, then I return to you. And he said: Give me the car. For how much? For fifteen cash.
This is called the issue of 'inah, because the seller in reality, or the buyer, only carried out this contract because of his need for the 'ayn, and the 'ayn is cash, so he stratagized for riba in this way.
We say: , meaning the lesser of the two. What is the lesser? The fifteen. . So we say to the seller now, who bought it for fifteen after selling it for twenty, we say: Either you limit it to fifteen, and there is nothing on the buyer, or you fall into riba if you take the full twenty from him.
And this is very clear, meaning its application to the issue of 'inah is clear. And this is what Shaykh al-Islam Ibn Taymiyyah (may Allah have mercy on him) chose, as his student Ibn al-Qayyim transmitted from him in Tahdhib al-Sunan, Sunan Abu Dawud.
In any case, now we understand that sale with deferral is halal or haram?
The student: ... .

The Shaykh : Sale with deferral is halal. This is the original ruling, due to its inclusion in the saying of Allah the Exalted: . But if it contains a prohibited matter, like the issue of 'inah, it becomes haram. Yes.