What is the difference between tawarruq and 'inah?
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Question:
What is the difference between tawarruq and 'inah?
Answer:
Answer: Tawarruq is permissible according to the majority of scholars, whereas 'inah is forbidden by consensus. 'Inah is when one sells a commodity for a deferred price and then buys it back from the debtor for a price lower than the deferred price; this is 'inah, and it is riba. As for tawarruq, it is when a person needs money and there is no one to lend to him, so he buys a commodity for a deferred price and then sells it for a spot price to spend its proceeds on his need. However, he must not sell it to the creditor from whom he bought the commodity; that is forbidden, and that is 'inah, because the substance of his money returns to him.
What is the difference between tawarruq and 'inah?
Answer:
Answer: Tawarruq is permissible according to the majority of scholars, whereas 'inah is forbidden by consensus. 'Inah is when one sells a commodity for a deferred price and then buys it back from the debtor for a price lower than the deferred price; this is 'inah, and it is riba. As for tawarruq, it is when a person needs money and there is no one to lend to him, so he buys a commodity for a deferred price and then sells it for a spot price to spend its proceeds on his need. However, he must not sell it to the creditor from whom he bought the commodity; that is forbidden, and that is 'inah, because the substance of his money returns to him.
Source
www.alfawzan.af.org.sa
The Arabic text is copied verbatim from the original source, without any edits.