A transaction whereby a person buys an asset/commodity from a seller on the basis of deferred payment, and sells it back to the same seller on cash basis at a lower price. ‘Inah is prohibited by shari’a as it constitutes a fictitious, manipulative transaction that is meant not for real trading, but rather for obtaining cash by involving a commodity which is returned to the same seller for a lower price. Therefore, the difference in price is an outright riba, and hence the prohibition of ‘inah-based dealings. Alternatively, and in order for the transaction to be shari’a –acceptable, a person in need of cash can resell the underlying commodity, already bought with deferred payment, to a third party, not the same seller, on cash basis for whatever price. This three-party transaction is known as tawarruq, and is permissible by shari’a.

‘Inah (also spelled einah) is an Arabic term (عينة) that denotes purchase with instant resale.