Dr. Muzammil H. Siddiqi, former President of the Islamic Society of North America, states:
"The word bid`ah means something new or innovative. The general definition of bid`ah is any new belief or action for which there is no sanction or authorization in religion. Bid`ah could be in beliefs and it could be in practices. As Muslims we are required to follow Allah and His Messenger. Almighty Allah says: "And this is a Book which We have revealed as a blessing: so follow it and be righteous, that you may receive mercy." (al-An`am: 155)
"Then We put you on the (right) Way of Religion: so follow that (Way), and follow not the desires of those who know not." (al-Jathiyah: 18)
"Say: Obey Allah and His Messenger: but if they turn back, Allah loves not those who reject Faith." (Al `Imran: 32) We must follow and obey and submit to Allah and His rules.
There are, however, matters in Islam in which we are allowed to innovate, learn and change. In most of our worldly matters, the Shari`ah leaves us to make our own decisions. It is for this reason that the scholars say that the basic rule for all customs and habits is that of permissibility, unless a legal evidence prohibits any of them. In other words, anything that is not expressly prohibited in the Qur'an and the authentic Sunnah, is permissible. For example in the acts of worship we have restrictions. Thus when we do any prayer or do any act of worship we must have a proof from the Qur'an and Sunnah indicating that this type of prayer or worship is permissible. Similarly, when we say that something is forbidden (haram) or obligatory (fard) we must have a clear proof from the Shari`ah.
However, there are many habits, customs and cultural ways of the past, present or future that are acceptable in the Shari`ah as long as they do not violate the clear texts of the Qur'an and Sunnah and the universal principles and objectives of Islamic law.
All those customs and traditions that contain elements of unlawful beliefs and practices are forbidden in Islam. Also those customs and habits are forbidden that are part of other religions, because in observing them one may resemble the people of other religions. The customs and traditions that are common, non-religious and non-sectarian are not forbidden in Islam. Graduation ceremonies, anniversaries, birthdays, national days etc. come in the permissible category of customs and habits. It is not forbidden to observe them, but one should also not make them compulsory, because there is no sanction or authorization for such action."
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