Muslims are commanded to deal justly and kindly with their non-Muslim neighbours or friends. Therefore, there is nothing wrong in exchanging gifts with them. Muslims are allowed to congratulate non-Muslims on their festive days and give them gifts and this becomes more of an obligation if the non-Muslims offer their greetings on Islamic festive occasions. Allah Almighty says: (When you are greeted with a greeting, greet in return with what is better than it, or at least return it equally…) (An-Nisa’ 4: 86)
However, Muslims are not to celebrate or participate in the religious festivities of non-Muslims, but they can participate in national celebrations and festivities as citizens of those lands while observing Islamic manners and controls in all matters.
Elaborating on the issue of congratulating non-Muslims on their festive occasions and giving them gifts, the European Council for Fatwa and Research issued the following fatwa:

“There can be no doubt as to the importance and the sensitivity of this issue, specially to Muslims residing in the West. The Council has received numerous questions and queries from those who live in these countries and interact with the non-Muslims. Indeed, between the Muslims and the non-Muslims are strong and integral links stipulated and deemed necessary by the means and manner of life itself, such as neighbourly relations, friendship at work or study. In fact, a Muslim may actually feel indebted toward a non-Muslim in particular circumstances, such as toward a hardworking and selfless supervisor or lecturer, a sincere and skilful doctor, and others. A famous Arab said that one is enslaved by others’ favours.
thus, what is the position of the Muslim to such people who are non-Muslims, who do not actually hold any animosity towards Muslims, do not fight them due to their religion, and did not actively seek to expel Muslims from their homes and lands?
The Holy Qur’an stipulates regulations as to how relationships between Muslim and non-Muslim are to be governed and carried out in Surat Al-Mumtahinah, which was essentially revealed to address the pagan polytheists. Allah Almighty says:(Allah does not forbid you to deal justly and kindly with those who fought not against you on account of religion and did not drive you out of your homes. Verily, Allah loves those who deal with equity. It is only as regards those who fought against you on account of religion, and have driven you out of your homes, and helped to drive you out, that Allah forbids you to befriend them. And whosoever will befriend them, then such are the wrong-doers.)(Al-Mumtahinah 60: 8-9)
Thus, the verse stipulates that there is a clear difference between those who fight Muslims and treat them as enemies, and those who interact and deal with Muslims in peace. We are commanded to treat the latter well and in a just and beautiful manner, not merely give them what is duly theirs by right and to take from them what is duly ours. Indeed, the command is to treat them beyond that and to deal with them in beautiful and ideal ways.
As for the other group — to whom the verse clearly forbids any allegiance or support offered in their favor — they are those who chose to become enemies of Islam and Muslims and worked actively to expel them from their homes and lands for no reason other than that they proclaim that Allah Almighty is their Lord, as did the Quraysh and the infidels of Makkah to the Prophet Muhammad (peace and blessings be upon him) and his Companions.
al-Bukhari and Muslim both reported on the authority of Asma’ bint Abi Bakr (may Allah be pleased with her), that she came to Prophet Muhammad (peace and blessings be upon him) and said: “O Messenger of Allah! My mother, who is a mushrik (a polytheist), has come to visit me and she desires to be close to me and to give me gifts. Shall I greet her and treat her well?” The Prophet (peace and blessings be upon him) stated: “Greet your mother and treat her well.”
This, while the woman was a mushrik, and the Qur’an clearly states that the People of the Scripture (Jews and Christians) are far closer to Islam and Muslims than mushriks. Indeed, the Qur’an gives allowance to eat from the food of the People of the Scripture and to marry them. Allah Almighty says:(…The food of the People of the Scripture is lawful to you and your is lawful to them, lawful to you in marriage are chaste women from the believers and haste women from those who were given the scripture before your time…)(Al-Ma’idah 5: 5)
Also, if marriage is permissible with them, then it goes without saying that marriage implicitly and necessarily decrees love and closeness. Allah Almighty states:(And amongst His signs is this, that He created for you wives from among yourselves, that you may find repose in them, and He has put between you affection and mercy…)(Ar-Rum 30: 21) Indeed, how can a man despise his wife, who is ultimately his partner in life, his spouse, the mother of his children? Almighty Allah says:(…they are body cover for you and you are the same for them…)(Al-Baqarah 2: 187)
Moreover, an important consequence and result of marriage is the coming together of two families to form blood bonds and relationships, a natural human form of relating to one another. Allah says:(And it is He Who has created man from water, and has appointed for him kindred by blood, and kindred by marriage…)(Al-Furqan 25: 54)
Also, there are the feelings and affections of maternity, and the clearly stipulated and emphasized rights of a mother upon her children in Islam. One asks in this context: is it an acceptable act according to these stipulations that one does not greet or congratulate his or her non-Muslim mother on a day of festivity that she celebrates? What about relatives from the mother’s side, such as grandparents, uncles, aunts and cousins? All those have rights upon a Muslim clearly stated in the Holy Qur’an, where Allah states:(But kindred by blood are nearer to one another regarding to inheritance in the decree ordained by Allah…)(Al-Anfal 8: 76), and also:(Verily, Allah enjoins justice and perfect mannerisms and giving to kith and kin…)(An-Nahl 16: 91)
Thus, if maternity and blood relation rights are obligatory upon a Muslim, in a way that exemplifies the beautiful manners of Islam and Muslims, it is also obligatory upon a Muslim to pay the due rights that work towards showing Muslims as people of beautiful character. The Prophet (peace and blessings be upon him) advised Abu Dharr (may Allah be pleased with him) saying: “Be aware of Allah wherever you are, and follow up a sin that you have committed with a good deed, so that sin may be erased, and treat people with beautiful manners.” (Reported by Ahmad, At-Tirmidhi, Ad-Darmi, and Al-Hakim) As is evident, the emphasis is upon “…and treat people with beautiful manners” not “…treat Muslims”.
the Prophet (peace and blessings be upon him) also strongly advised us to deal with non-Muslims in a mild and gentle manner, not using stern and terrorizing methods. It was reported that when a group of Jews approached the Prophet (peace and blessings be upon him) and greeted him with twisted pronunciation, and thus uttered “Assam`alaykum, O Muhammad!” (meaning “death and destruction come upon you”) instead of “as-salamu `alaykum”, `A’ishah (may Allah be pleased with her) heard them and responded by saying, ‘assamu `alaykum also and the curse and wrath of Allah!” The Prophet (peace and blessings be upon him) rebuked `A’ishah for what she had said. She told him, “Did you not hear what they said?” He said, “I did, and I responded by saying, ‘And upon you,’” (i.e., that death will come upon you as it will come upon me.) He went on to say, “O `A’ishah! Allah loves gentleness in all matters.” (Reported by Al-Bukhari and Muslim)
Indeed the permissibility of congratulating non-Muslims on their festive days becomes more of an obligation if they offer their greetings on Islamic festive occasions, as we are commanded to return good treatment with similar treatment, and to return the greeting with a better one or at least with the same greeting. Allah Almighty says: “When you are greeted with a greeting, greet in return with what is better than it, or at least return it equally…” (An-Nisa’ 4: 86)
a Muslim must never be less charitable or pleasant or indeed of lesser manners than any other, as the Prophet (peace and blessings be upon him) stated in the hadith: “The most perfect believers in terms of their iman are those who possess the most beautiful manners.” (Reported by Ahmad, At-Tirmidhi, Ad-Darmi, and Abu Dawud), and he (peace and blessings be upon him) also stated: “Verily I have been but sent to perfect the most noble of manners.” (Reported by Ahmad, Al-Bukhari in Al-Adab Al-Mufrad and Al-Bazzar in KashfulAstar)
The significance of this increases dramatically if we are interested in inviting them to Islam and making them like Muslims, which is an obligation upon us all, as this cannot be achieved by treating them roughly, sternly and violently, but rather by beautiful manners and sublime ethics. The Prophet (peace and blessings be upon him) dealt with the polytheists of Quraysh in the most beautiful of ways and manners throughout his life in Makkah despite their animosity, persecution, oppression and extreme insult of him (peace and blessings be upon him) and his companions. This was epitomized by the fact that due to the incredible trust they had in him, they deposited their wealth and possessions with him, in fear that they may be lost or stolen. When the Prophet fled Makkah to Madinah, he left behind `Ali (may Allah be pleased with him), whom he commanded to return the deposits and trusts that were with him (peace and blessings be upon him).
There is also no objection to accepting gifts and presents from them, and to return their gifts in kind, on condition that these gifts are not unlawful in themselves, such as being alcohol or pork. The Prophet (peace and blessings be upon him) accepted the gift of the King of Egypt and several others (See: At-Tahawi’s SharhMushkil Al-Athar).
We also wish to mention that some jurists, such as Ibn Taymiyah and his student the great scholar Ibn-ul-Qayyim, adopted stringent measures and restricted the permissibility of this issue and the participation of Muslims in the celebrations of non-Muslims. We adopt this same stance, advising Muslims not to celebrate the festivities of non-Muslims, whether mushriks or People of the Scripture, as we find some ignorant Muslims celebrating Christmas as they would normally celebrate `Eid Al-Fitr and Al-Adha, and maybe even more so. This is unlawful, as we Muslims have our unique festivities. But we see no objection to congratulating others on their festivities if there is some relationship or fellowship link that deems positive social interaction and beautiful exchange a must according to our sublime and noble Islamic Shari`ah.