Assalaamalaikum, I am a Neurosurgeon, starting a job in a private hospital, my salary is Rs 180000 per month. If all of this is taxed I land up paying 30-35% of the amount. I also do not have a house of my own nor do I have any ancestral property or any other source of income, my parents funded my education with difficulty and they no longer earn. If I buy a car and a house on loan which of course will have interest involved in it, I can get tax rebate, is it permissible? Also brief me on other halal sources where i can invest to save Income tax? My parents are elderly and their medical expenditure at times is exhorbitant, also as you know medical bills are too high nowadays, is it OK to have a medical insurance for them, and also for others? Regarding car insurance you have told that since govt insists, it is permisssible, is it ok to maintain a 1st party insurance all the time even after few years of purchase?
Answer
(Fatwa: 801/738=D/1429)
Fro saving your salary from income tax, buying a car or house on loan (when you are in dire need of both) in a way that the interest is deducted from income tax is permissible. If instead of taking money form bank, you ask the bank to give you a car or house by purchasing and to include its interest in the price so that total amount (actual price with interest) is the price of the car or house and then you pay the price in installments after purchasing that car or house. In this case, your amount of income tax will be saved and there will no sin to give interest to the bank.
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband