2. What type of charity can be done (Is that charity to believers or non believers)?
3. Where else interest money can be used?
بسم الله الرحمن الرحيم
(1) You may pay income tax by the interest money received from government banks. No specific number is fixed by the Shariah, whatsoever interest amount you have you may pay income tax by it.
(2) You may give the interest money to poor and destitute whether they are Muslims or non-Muslims.
(3) Either interest amount should be given to the poor or needy people as charity or be it returned to the institution from where it has been received. There is no other way to its use except it.
……لإن سبيل الكسب الخبيث التصدق إذا تعذر الرد على صاحبه (رد المحتار).
Allah knows Best!
Darul Uloom Deoband
This answer was collected from the official ifta website of Darul Uloom Deoband in India.