بسم الله الرحمن الرحيم
According to Shariah income tax is a draconian tax. Hence if there is no legal method to avoid or lessen it then it is allowable to adopt the method mentioned in the question. However, only the interest received from the government bank can be paid in income tax not the interest of a private bank. It should also be noted that after paying the income tax if some amount remains then you cannot use it for yourself rather it should be given in charity to the poor and needy ones without the intention of reward. (Excerpt: Fatawa Nizamia, 1: 233, 234, pub. Thanvi Offset Printers, Deoband, Masail Sud, by Hadhrat Mufti Habibur Rahman Khairabadi, pp. 244-245, pub. Hira Book Depot, Deoband)
Allah knows Best!
Darul Uloom Deoband
This answer was collected from the official ifta website of Darul Uloom Deoband in India.