Reading Quran is a purely physical act of worship, and it is not permissible to accept payment for reading Quran for the deceased or to give payment to one who reads, and there is no reward in that case, and the one who takes payment and the one who gives it are both sinning.
Shaykh al-Islam Ibn Taymiyah said: It is not correct to hire someone to read Quran and give the reward for that to the deceased, because that has not been narrated from any of the imams. The scholars said: The one who reads for money will have no reward, so what does he have to give to the deceased?
The basic principle concerning that is that acts of worship are forbidden; no act of worship should be done unless there is shar’i evidence to show that it is prescribed.
Allah says in the Quran:
“And obey Allah and the Messenger”
The Prophet (peace and blessings of Allah be upon him) said: “Whoever does anything that is not in accordance with this matter of ours will have it rejected.” According to another report: “Whoever introduces anything into this matter of ours that is not part of it will have it rejected.” This action – hiring someone to read Qur’aan for the dead – is something that it is not known that the Prophet (peace and blessings of Allah be upon him) or any of his companions did it, and the best of guidance is the guidance of Muhammad (peace and blessings of Allah be upon him) and the worst of matters are those which are innovated. All goodness is in following that which the Messenger (peace and blessings of Allah be upon him) brought, with the proper intention.
Allah says in the Quran:
“And whosoever submits his face (himself) to Allah, while he is a Muhsin (good‑doer, i.e. performs good deeds totally for Allah’s sake without any show-off or to gain praise or fame and does them in accordance with the Sunnah of Allah’s Messenger Muhammad), then he has grasped the most trustworthy handhold”
“Yes, but whoever submits his face (himself) to Allah (i.e. follows Allah’s religion of Islamic Monotheism) and he is a Muhsin then his reward is with his Lord (Allah), on such shall be no fear, nor shall they grieve”
All evil lies in going against that which was brought by the Messenger of Allah (peace and blessings of Allah be upon him) and directing one’s intention in any deed to someone or something other than Allah.
There is no basis for this ‘ataaqah in sharee’ah; it is a reprehensible innovation that was not done by the Messenger (peace and blessings of Allah be upon him) and he did not tell us to do it, and none of his companions (may Allah be pleased with them) did it either. Whatever is like that, no believer should do it.
What is prescribed is to say Dua for the deceased, and to give charity on his behalf, as Muslim (1631) narrated from Abu Hurayrah (may Allah be pleased with him) that the Messenger of Allah (peace and blessings of Allah be upon him) said: “When a man dies, all his good deeds come to an end except three: ongoing charity (sadaqah jaariyah), beneficial knowledge, or a righteous son who will pray for him.”
Al-Nawawi (may Allah have mercy on him) said in Sharh Muslim: This indicates that the reward for Dua will reach the deceased, as will that of charity. As for reading Quran and giving the reward for that to the deceased, offering prayers on his behalf, etc, the view of al-Shaafa’i and the majority of scholars is that this does not reach the deceased.
So say a great deal of Dua for deceased, and give whatever you can in charity on his behalf; if he did not do Hajj or ‘Umrah and you can do Hajj or ‘Umrah on his behalf, then do that. This is what will benefit him, by Allah’s leave.
Another way of honouring one’s deceased is to honour his friends and uphold ties of kinship.
Allah makes sickness an expiation for His believing slave, and it may also be a means of raising his status, if he is patient and seeks reward thereby. The Prophet (peace and blessings of Allah be upon him) said: “No hardship, distress, worry or grief befalls a Muslim, not even a thorn that pricks him, but Allah will expiate some of his sins thereby.” Narrated by al-Bukhaari (5642) and Muslim (2573).
We ask Allah to have mercy on the deceased Muslims.
And Allah knows best.