This type of LIC and VPF mentioned in the question is interest-based investment which has been declared unlawful by the holy Quran. It is haram to avail it with the intention of investment. If one has availed the LIC by chance in compulsion approved by Shari’ah, then too the ruling is that it is wajib on him to give the extra amount (other than the capital) in charity. The charity should be made without the intention of reward.
(1 & 2) If one received the amount of such interest and he has to pay some income tax amount that is due on him, according to some Ulama it is lawful to pay it in the income tax but not only through paper and mental calculation but practically the interest amount should be paid in income tax.
(3) It is not allowed for you to pay the interest of your account, to the income tax of any other person. It shall be useless to take the money in its return because the amount that you will receive from that person would be interest for you. It shall be wajib on you to give this amount in sadaqa like the one in answer number 1.
(4) It is not lawful to take loan on interest in order to save oneself from the income tax. One shall be sinful for interest-based dealing and the curse of interest shall creep in all the money and business. Almighty Allah says in the holy Quran:
يَمْحَقُ اللّهُ الْرِّبَا . [البقرة : 276]
Allah (Subhana Wa Ta’ala) knows Best
Darul Uloom Deoband