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Is it permissible to obtain a tax receipt when one makes a Zakaat donation?

Answered according to Hanafi Fiqh by Arij Canada

Is it permissible to obtain a tax receipt when one makes a Zakaat donation?

Answer:

As Salaamu Alaikum wa Rarahmatullah wa Barakatuh

One needs to understand the concept of tax receipt and how it functions in order for one to understand the Masa’lah.

Income tax is paid to the government from the recipient of the income on an annual basis. At the end of the tax year when tax returns are filed, the government refunds or reduces the tax liability based on a percentage of donation made to registered charities recognized by the government. Hence, the money which is refunded or tax liability reduced is from the government and it does not reduce the amount of donation available to distribute.

Having understood this, let us now look at the Masa’lah. When a person entrusts an organization with the responsibility of distributing his Zakaat money, the full Zakaat money is given to the worthy recipients of Zakaat who are eligible to receive Zakaat. The money one receives from the government in the form of tax refund or reduction in tax liability, is a separate benefit which has no connection with the Zakaat money. Based on this, it is permissible for one to claim the tax receipt received for Zakaat money on their tax return.

AND ALLAH TA’AALA KNOWS BEST

Muhammad Z Panchbhaya

This Q&A was collected from the official web portal of Academy of Research in Islamic Jurisprudence (Arij) from Canada, which was headed by Mufti Ibrahim Kureshi and Mufti Zakariyya Panchbhaya. As the original website is no longer accessible, we have provided a source link of each answer to the archive copy from Way Back Machine.

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