What kind of traditions/customs are allowed in Islam?
I have read that any tradition/custom that does not contradict the Shari’ah is allowed. Based on this, some people argue that is alright to celebrate Christmas because in the modern times Christmas celebrations have nothing to do with the religion of Christians. Also, based on a hadith, Muslims are forbidden to imitate the disbelievers.
Then why do scholars permit the western style of dress code for men?
In the same context, some say that religion and culture are two different things and divide customs into two categories,
1. Customs/practices which people make them part of religion, they are Bid'ah and haram.
2. Harmless social customs which are the part of any society and do not have any shirk or haraam elements, i.e. birthdays, exchanging gifts on certain occasions and giving money to relatives as a courtesy when visiting them, etc, can be practised by not making them part of the religion.
Where the line should be drawn?
Allah said in the Qur'an,
الْيَوْمَ أَكْمَلْتُ لَكُمْ دِينَكُمْ وَأَتْمَمْتُ عَلَيْكُمْ نِعْمَتِي وَرَضِيتُ لَكُمُ الْإِسْلَامَ دِينًا ۚ
“Today I have perfected your religion and I have completed my favour upon and I have chosen Islam as your religion...."
لَّقَدْ كَانَ لَكُمْ فِي رَسُولِ اللَّهِ أُسْوَةٌ حَسَنَةٌ
“Verily in the Prophet of Allah you have the best example..."
Prophet Muhammad (ﷺ) is reported to have said; “Whoever innovates something in our religion, his efforts will be rejected" and in another narration "whoever practices bid'ah acts, his efforts will be rejected..."
Surely this celebration of the Christmas has no basis in the Shariah, was never practiced by Prophet Muhammad ﷺ and his companions and it does not matter who started it and how it has evolved, the ruling is still the same: It's a Bid'ah.
As for the ‘Urf; as you indicated: It should not contradict the Qur'an and the Sunnah. And if the celebrations were part of ‘urf ( which they are not) they still contradict the Shari’ah and thus they will never be part of our deen. The same applies to the Christmas tree and the Santa. If you look at what Christmas has become, you will also realise that it has become a time of great fitnah, from killings to zina, you name it; it all happens very much on the Christmas day.
As for the dress code:
The Shari’ah has not specified what you would call Muslim dress. Yes, there are conditions to be met but there is nothing called Islamic dress. So the fact that something is worn in the West does not necessarily mean that it is haraam just like everything worn in Muslim countries does not necessarily mean that it is halal. Yes we are not to wear something which identifies a specific group from the non believers like those clothes used by the pastors or nuns which are for those specific people. Other than that Islam has left the door open and has allowed us to wear shirts, trousers, thawbs (kurtas), sandals: as long as they are within the boundaries of the Shari’ah.
It has to be said that it is a false analogy to compare cerebrating Christmas and the clothes people wear. For the former; there are explicit proofs forbidding it and for the latter it remains halal until proven otherwise.
So we are not wearing their dress codes; Abu Jahl used to wear a thawb, but he was and is one of the worst people. I am not saying we should wear tight jeans, or G - Unit T-shirts or put on some chains or that the Muslimah should wear the mini skirt and all those funny things out there; clearly this does not mean the conditions put for our clothes requirements, what I am saying is; when it comes to dressing, the Shari’ah says we are allowed to wear even what they wear as long as it does not go outside the boundaries of our deen.
So celebrating Christmas with or without the Santa will always be Bid'ah and that's definitely imitating the Kuffar.
As for your last question, the one who decides what is wrong or right or what is harmless is Allah. There is no doubt Christmas is linked to issues of faith unless these guys are even clueless to the term Christmas itself. The name Christmas says it all and like I said its foundation was based on the belief and love the Christians thought they had. The problem is we are too weak to see the plots of Satan. Just the change of a name or a change of something makes something attractive and halal. Riba is now called benefit, walking naked is called fashion, we had homosexuals and now we have gays, etc. Christmas now is something that should be celebrated by Muslims, wow! As for the birthday not being part of religion, well we can agree but one thing Prophet Muhammad ﷺ had a birth day and so did his Sahabah surely they could have given us the mubah and halal way of innocently celebrating the birthday. Reality is this who want to sin always find some reason and some excuse especially those involved in bid'ah and this why the ‘ulama say it is easier for a mushrik or kafir to repent than for the one involved in bid’ah. Shaytan had a reason not to prostrate; guess what HE WAS WRONG!
 Surah Al Mai’da, 5:3
 Surah al Ahzab, 33:21
 40 Hadeeth Nawawi, Hadeeth 5< Back to Questions