In the Name of Allah, Most Merciful and Compassionate
There are two issues here:
a) the ruling
b) understanding two key concepts:
i) the nature of good and bad;
ii) the nature of our slavehood to Allah.
A. The Ruling of Making Dua for Dead Non-Muslims
There is a useful summary of this in two entries of al-Mawsu`a al-Fiqhiyya (Kuwait):
Seeking forgiveness for a non-Muslim
The jurists agree that seeking forgiveness for a non-Muslim is prohibited. However, if one seeks forgiveness for a non-Muslim hoping that they become Muslim and thus be forgiven then it is permitted according to the Hanafi scholars [f: because they understood the prohibition to refer to seeking forgiveness for them while they remained in their state of disbelief, which Allah has explicitly stated that He will not forgive, if they were aware of the truth]
Praying for mercy for a non-Muslim
Nawawi (Allah have mercy on him) stated in his al-Adhkar that it is permitted to pray for guidance for non-Muslims, good health well-being, and the like, because of the hadith of Anas (Allah be pleased with him) that, “The Prophet (Allah bless him & give him peace) asked for water and a Jew gave him some, so the Prophet (Allah bless him & give him peace) said to him, ‘May Allah make you beautiful,’ so the man did not see grey hair till he died.”
As for after their death, it is impermissible (haram) to make dua for forgiveness and the like for a non-Muslim, for Allah Most High said, “It is not for the Prophet and those who believe to pray for the forgiveness of unbelievers even though they may be near of kin after it has become clear that they are people of hell-fire.” [Qur’an, 9: 113]
There are many hadiths that mention this, and there is scholarly consensus (ijma`) on this matter. [al-Mawsu`a al-Fiqhiyya, Kuwait]
As for making dua that Allah give them that which is best for them, or that which they deserve, even after death, while consigning their affairs to Allah, there is nothing wrong with this. [As for the fate of non-Muslims in the next life, this is discussed in the answer after this one, below.]
B. Understanding Two Key Concepts
In order to understand the rulings of the Shariah, we must understand two key concepts:
a) The nature of good and bad;
b) The nature of our slavehood to Allah.
The first concept: The nature of good and bad
The position of Sunni Islam is that good and bad are not determined by reason but only by revelation, and therefore only known through the Shariah.
The mind’s role is not to determine what is good and bad or right and wrong, but, rather, to understand and implement the rulings of Allah Most High, as contained in the Shariah of the Prophet (Allah bless him and give him peace).
This was explained by the great 20th Century Egyptian master of the science of legal methodology (usul al-fiqh), Shaykh Abd al-Wahhab Khallaf, as translated by Shaykh Nuh Keller in his Reliance of the Traveller:
a1.0 THE KNOWLEDGE OF GOOD AND BAD
a1.1 (Abd al-Wahhab Khallaf:) There is no disagreement among the scholars of the Muslims that the source of legal rulings for all the acts of those who are morally responsible is Allah Most Glorious.
a1.2 The question arises. Is it possible for the mind alone, unaided by Allah’s messengers and revealed scriptures, to know rulings, such that someone not reached by a prophet’s invitation would be able through his own reason to know Allah’s rule concerning his actions? Or is this impossible?
a1.3 The position of the Ash’aris, the followers of Abul Hasan Ash’ari, is that the mind is unable to know the rule of Allah about the acts of those morally responsible except by means of His messengers and inspired books.
For minds are in obvious disagreement about acts. Some minds find certain acts good, others find them bad. Moreover, one person can be of two minds about one and the same action. Caprice often wins out over the intellect, and considering something good or bad comes to be based on mere whim. So it cannot be said that an act which the mind deems good is therefore good in the eyes of Allah, its performance called for and its doer rewarded by Allah; or that whatever the mind feels to be bad is thus bad in the eyes of Allah, its nonperformance called for and its doer punished by Allah.
a1.4 The basic premise of this school of thought is that the good of the acts of those morally responsible is what the Lawgiver (syn. Allah or His messenger (Allah bless him and give him peace)) has indicated is good by permitting it or asking it be done. And the bad is what the Lawgiver has indicated is bad by asking it not be done. The good is not what reason considers good, nor the bad what reason considers bad. The measure of good and bad, according to this school of thought, is the sacred Law not reason (dis:W3).
a1.5 According to this school, a person is not morally obligated by Allah to do or refrain from anything unless the invitation of a prophet and what Allah has legislated have reached him (n:w4 discusses Islam’s relation to previous prophets’ laws). No one is rewarded for doing something or punished for refraining from or doing something until he knows by means of Allah’s messengers. What he is obliged to do or obliged to refrain from.
So whoever lives in such complete isolation that the summons of a prophet and his Sacred Law do not reach him is not morally responsible to Allah for anything and deserves neither reward nor punishment.
And those who lived in one of the intervals after the death of a prophet and before a new one had been sent were not responsible for anything and deserve neither reward nor punishment.
This view is confirmed by the word of Allah Most High.
“We do not punish until we send a messenger” (Koran 17:15).
(.Ilm usul al-fiqh (y71) 96-98)
The second concept: The nature of our slavehood to Allah
Allah Most High explained that the only purpose and meaning for the existence of humanity is to worship Allah:
“I created the jinn and humankind only that they might worship Me.” (Qur’an, 51.56)
The very basis of worship is submission. Raghib al-Isfahani explained that,
“Slavehood (`ubudiyya) is manifesting abasement. Worship (`ibada) is more emphatic, for it is the limits of abasement, and no one is deserving of it except the one who has absolute granting, which is Allah Most High. This is why he said, “That you not worship other than Him.” [Qur’an, 17.23]
Worship is two types:
1. Worship by compulsion
[f: This is the state of everything in relation to its Creator; its very indigence and need to Allah in terms of creating and sustaining it is worship.]
2. Worship by choice.
[As for slavehood, this is various types, including:]
a) One who is legally a slave. [f: That is, not free.]
b) One who is a slave in terms of existence. This slavehood is only to Allah. [f: And it is the essential reality of all creation.]
c) One who is a slave by worship and service. In this, there are those who are slaves to Allah with sincerity, and whose whose slavehood is to this life and its concerns. [Isfahani, Mufradat Alfadh al-Qur’an, 542, abbreviated]
Slavehood to Allah is not only to pray five times a day and to perform other acts of worship. Rather, it is to submit to Allah in all matters, outwardly and inwardly, as He as commanded us to, by following the guidance of the Prophet (Allah bless him and give him peace), in whose obedience lies the obedience of Allah.
The Prophet’s Guidance Has Been Preserved
This guidance has been preserved, as Allah promised, in the Shariah of Islam, as encapsulated in the methodology and understanding of the Sunni path, and its scholars, who are the inheritors of the Prophet and those regarding whom the Beloved of Allah (Allah bless him & give him peace) said,
“There shall always remain a group in my Community who are manifest on the truth, unaffected by those who oppose them, until the command of Allah comes than they are resolute on this.” [Mentioned with numerous similar wordings by Bukhari, Muslim, and the other major hadith collections.]
Imam Bukhari explained this group in his chapter heading as being, “The people of knowledge.” This is deduced, as the scholars explain, from numerous Qur�anic verses and Prophetic hadiths, such as the hadith related by Sayyiduna Mu`awiya (Allah be pleased with him) that the Messenger of Allah (blessings and peace be upon him) said, “Whoever Allah wishes well for, He gives deep understanding (fiqh) of religion.” [Bukhari and Muslim]
Sincerely Keeping One’s Duty To Allah
And Allah reminded us that,
“He who obeys Allah and His messenger, fears Allah, and keeps duty (unto Him): such indeed are the victorious.” [Qur’an, 24.52]
Imam Nawawi (Allah have mercy on him) said in his Majmu` Sharh al-Muhadhdhab:
“Abul Qasim al-Junayd (Allah have mercy on him) said, “A sincere person changes forty times a day, while the hypocritical show-off stays as he is forty years.”
The meaning of this is that the sincere person moves with what is right, wherever it may lead, such that when prayer is deemed better by the Sacred Law, then he prays, and when it is best to be sitting with the learned, or the righteous, or guests, or his children, or taking care of something a Muslim needs, or mending a broken heart, or whatever else it may be, then he does it, leaving aside what he usually does.
And likewise for fasting, reciting the Koran, invoking Allah, eating or drinking, being serious or joking, enjoying the good life or engaging in self-sacrifice, and so on. Whenever he sees what is preferred by the Sacred Law under the circumstances, he does it, and is not bound by a particular habit or kind of devotion as the show-off is. The Prophet (Allah bless him and give him peace) did various things of prayer, fasting, sitting for Koran recital and invocation, eating and drinking, dressing, riding, lovemaking with his wives, seriousness and jest, happiness and wrath, scathing condemnation for blameworthy things, leniency in punishing those who deserved it and excusing them, and so ion, according to what was possible and preferable for the time and circumstances (al-Majmu’ (y108),1.17- 18, from Shaykh Nuh Keller’s translation of Reliance of the Traveller, c2.6).