Bai Bithaman Ajil (BBA) is a buy-sale property instrument. BBA model consist of payment for principal and profit margin. Nevertheless, the fixation of profit margin in this contract is unclear and the conformity of this contract towards the law of Shariah is still in doubt. Hence, a new approach is introduce to explain and exclude the element of riba in the transaction. Qardhul hasan is a benevolent loan without any additional payment in its principal. Thus, the transaction which applied this concept is conforming towards Shariah. This paper explain the existing BBA model and the early development of the modified BBA which entails the application of qardhul hasan concept. The results prove that the modified BBA composed from the concept of qardhul hasan is better than the existing BBA model.

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