Can interest money be paid in income tax?

Answered according to Hanafi Fiqh by
Can we keep the money in banks to get the interest only for sake of paying the income tax in India? Example: I have to pay nearly Rs.80,000 tax to Indian government every year and it is deducted from my salary every month. Can I keep certain amount in any banks of India to get an interest money of less than Rs.80,000, so that I can pay the tax?

بسم الله الرحمن الرحيم

(Fatwa: 584/861/N=09/1437)

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 Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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