I just read your answer to a question on paying zakat on 401K which is Haram. How in the world Muslim be apying zakat on the money which is haram? or Is it been declared Halal?
Answer
Interest monies must be given to the poor and needy who are eligible to
accept Zakaat without the intention of reward. However, interest received
from government institutes, eg. post office could be used to offset
government taxes. Interest received from private banks cannot be used to
offset taxes. It may be used to offset interest charged from the same bank.
There is no Zakaat on interest money.
and Allah Ta’ala Knows Best
Mufti Ebrahim Desai
FATWA DEPT.