Fatwa No : 78010
Ruling on provident fund

Ruling on provident fund

I am a government employee. In our department, money is deposited in our salary every month through the DSP fund. When it reaches one lakh or more, it increases by fifteen to twenty thousand every year. How does this process work?

الجوابُ حامِدا ًو مُصلیِّا ً

There are two types of DSP funds. (1) Mandatory (2) Optional -
In the mandatory DSP fund, the amount deducted from the employee's salary every month, and the increase made by the department on its own behalf every month, and then the amount collected annually as interest on the total, the ruling on these three amounts is the same and that is, that all these amounts are actually part of the salary, even if they are given in the form of interest or some other name, so it is permissible and correct for the employee to take them and use them for his own use.
Whereas the second type of optional DSP fund in which, employee deducts at his own will and discretion, and the department pay interest on it, it is not permissible to take it and use it for his own use. It is necessary to avoid it.
In this second type, since there is a danger of using it as a means of usury along with the similarity to interest (Riba), either this money should not be received at all, or, without receiving it, should be given as charity to someone deserving of Zakat without the intention of reward.

مأخَذُ الفَتوی

كما فی البحر الرائق: (قوله والأجرة لا تملك بالعقد) (الى قوله) (قوله بل بالتعجيل أو بشرطه أو بالاستيفاء أو بالتمكن) يعني لا يملك الأجرة إلا بواحد من هذه الأربعة والمراد أنه لا يستحقها المؤجر إلا بذلك كما أشار إليه القدوري الخ(ج7،ص300،ط: دار الكتاب الإسلامي)۔