Fatwa No : 82564
To buy at a low price and sell at a higher price

To buy at a low price and sell at a higher price

Assalamu Alaikum! I have made two separate mobile phone deals. I want to know whether there is any element of interest (riba) in these transactions. The details of the deals are as follows:
1) I had a mobile phone, Nokia 2100. When I went out to sell it, I estimated its price to be between 3,000 to 3,500 rupees. A person from my own factory came, and I told him:
“If you pay in cash, the price is 3,000 rupees; and if you pay in monthly installments, then the total will be 3,500 rupees.”After some discussion, the deal was finalized at 3,000 rupees on monthly installments of 500 rupees.Is this transaction valid? Is there any element of interest in it?
2) A colleague at my office wanted to sell his phone due to some urgent need. Another colleague made him an offer: I will pay 6,000 rupees in cash and the remaining 2,500 rupees in monthly installments of 500 rupees.” This offer was quite good for the seller, as the new set was priced at 8,300 rupees in the market at that time. Due to the installment condition, the deal didn’t go through. So, I bought the phone from the first colleague for 7,500 rupees in cash, and then sold the same phone to the second colleague for 8,500 rupees (6,000 in cash and the remaining in monthly installments of 500 rupees).
Is this transaction valid and permissible? Kindly explain the reality of both deals. And if they are impermissible (haram), what should be done about them? I would be truly grateful.

الجوابُ حامِدا ًو مُصلیِّا ً

In both of the mentioned cases, the method of sale is Islamically permissible and valid; it is not considered an interest-based (usurious) transaction