From my understanding of the Qur'an and the Sunnah yes Musical Instruments are haram.
Allah says in Luqmaan 31:6:
“And of mankind is he who purchases idle talks (i.e. music, singing) to mislead (men) from the path of Allaah…†[Muhsin Khan]
"And of the people is he who buys the amusement of speech to mislead [others] from the way of Allah without knowledge and who takes it in ridicule. Those will have a humiliating punishment." [Saheeh International]
Many Sahaba (Companions of the Prophet (SAW)) and Taabi’in said that this refers to Musical instruments or Music.
For example Ibn ‘Abbaas (may Allaah be pleased with him) said:
this means singing. Mujaahid (may Allaah have mercy on him) said: this means
playing the drum (tabl). (Tafseer al-Tabari, 21/40).
Al-Hasan al-Basri (may Allaah have mercy on him) said: this aayah was revealed concerning
singing and musical instruments (lit. woodwind instruments). (Tafseer Ibn Katheer, 3/451).
Ibn Mas`ud said "This -- by Allah -- refers to
singing.'' (Tafseer Ibn Katheer)
In the footnotes of the Qur'an by Saheeh International it reads:
(Amusement of Speach) i.e. that which has no benefit. Described by different Sahahah as Shirk, Misleading Stories, Frivolous songs or
Music but Includes all which distracts or diverts one from the Qur'an and Remembrance of Allah.
Ibn al-Qayyim (may Allaah have mercy on him) said: The interpretation of the Sahaabah and Taabi’in, that ‘idle talk’ refers to singing, is sufficient. This was reported with saheeh isnaads from Ibn ‘Abbaas and Ibn Mas’ood. Abu’l-Sahbaa’ said: I asked Ibn Mas’ood about the aayah (interpretation of the meaning), ‘“And of mankind is he who purchases idle talks’ [Luqmaan 31:6]. He said: By Allaah, besides Whom there is no other god,
this means singing – and he repeated it three times. It was also reported with a saheeh isnaad from Ibn ‘Umar (may Allaah be pleased with them both) that this
means singing.
So this Ayat refers to Singing and Music as was understood by the Sahaba and those who followed them.
Allaah says:
“Do you then wonder at this recitation (the Qur’aan)?
And you laugh at it and weep not,
Wasting your (precious) lifetime in pastime and amusements (singing)â€
[al-Najm 53:59-61]
‘Ikrimah (may Allaah have mercy on him) said: it was narrated from Ibn ‘Abbaas that al-sumood [verbal noun from saamidoon, translated here as “Wasting your (precious) lifetime in pastime and amusements (singing)â€] means “
singingâ€
Ibn Katheer (may Allaah have mercy on him) said: Allaah says (interpretation of the meaning) “Wasting your (precious) lifetime in pastime and amusements (singing)†– Sufyaan al-Thawri said, narrating from his father from Ibn ‘Abbaas: (this means)
singing. This is Yemeni (dialect): ismad lana means ghan lana [sing to us]. This was also the view of ‘Ikrimah. (Tafseer Ibn Katheer).
The Messenger of Allaah (peace and blessings of Allaah be upon him) said:
“Among my ummah there will certainly be people who permit zinaa, silk, alcohol and
musical instruments…†(Narrated by al-Bukhaari no. 5590; narrated as mawsool by al-Tabaraani and al-Bayhaqi. See al-Silsilah al-Saheehah by al-Albaani, 91).
It was narrated from Abu Malik Ash’ari that the Messenger of Allah (sallallahu 'alaihi wa sallam) said:
“People among my nation will drink wine, calling it by another name, and
musical instruments will be played for them and singing girls (will sing for them). Allah will cause the earth to swallow them up, and will turn them into monkeys and pigs.†( Sunan Ibn Majah Book 36, Hadith 4156 Grade: Hasan)
It was narrated that Naafi’ (may Allaah have mercy on him) said: Ibn ‘Umar heard a woodwind instrument, and he put his fingers in his ears and kept away from that path. He said to me, O Naafi’, can you hear anything? I said, No. So he took his fingers away from his ears and said: I was with the Prophet (peace and blessings of Allaah be upon him) and he heard something like this, and he did the same thing. (Saheeh Abi Dawood)
It was narrated that Al-Awza'i said:
"Umar bin 'Abdul-'Aziz wrote a letter to 'Umar bin Al-Walid in which he said: 'The share that your father gave to you was the entire Khumus, but the share that your father is entitled to is the same as that of any man among the Muslims, on which is due the rights of Allah and His Messenger, and of relatives, orphans, the poor and wayfarers. How many will dispute with your father on the Day of Resurrection! How can he be saved who has so many disputants?
And your openly allowing musical instruments and wind instruments is an innovation in Islam. I was thinking of sending someone to you who would cut off your evil long hair."' (Sunan an-Nasa'i 4135 Graded Sahih)
However there is an exception.
The exception to the above is the daff – without any rings (i.e., a hand-drum which looks like a tambourine, but without any rattles) – when used by women on Eids and at weddings. This is indicated by authentic reports.
So in Summary due to the Verses of the Qur'an, statements of the Prophet SAW, Statements and Actions of the Sahaba and the Taabi’in Music is Haram.
Further reading :
http://islamqa.info/en/ref/5000/music
