Answer
(Fatwa: 1623/1623/M=1431)
Do you deposit the money in monthly PF by your choice or is itt deducted automatically from your salary and is deposited in the bank? Both the cases carry different rulings. The first case is of interest while the second is not. However, one is allowed to pay income tax with interest money in compulsion but depositing money in bank with the intention of getting interest and paying income tax with that interest money is disliked. One should avoid depositing money in the bank in order to get interest. One can pay the income tax with the interest of bank because the interest finally reaches the treasury of government (from where it came).
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband