I need to know whether it is allowed and permissible in Shariah to take home loan for saving income tax when we don’t have any other option. I’ll explain you my situation based on which please guide me. I’m working in a software company and every year we have to pay income tax to the government. We don’t have any control over it. Till now am able to get some amount of tax benefit through fixed deposit (I keep the premium amount and give interest to the poor) but still I have to further pay almost 75000/- as tax every year. Now for saving this 75000/- only option left for me is Home Loan Interest. If I take home loan then this amount could also be saved. My query is under such circumstances can I take home loan to save this income tax. By the way, we also live in rented apartment and genuinely need a home for my family also and I don’t have that much money to buy it at one go. Please guide us.

I need to know whether it is allowed and permissible in Shariah to take home loan for saving income tax when we don’t have any other option. I’ll explain you my situation based on which please guide me. I’m working in a software company and every year we have to pay income tax to the government. We don’t have any control over it. Till now am able to get some amount of tax benefit through fixed deposit (I keep the premium amount and give interest to the poor) but still I have to further pay almost 75000/- as tax every year. Now for saving this 75000/- only option left for me is Home Loan Interest. If I take home loan then this amount could also be saved. My query is under such circumstances can I take home loan to save this income tax. By the way, we also live in rented apartment and genuinely need a home for my family also and I don’t have that much money to buy it at one go. Please guide us.

Answer

(Fatwa: 1056/392/TH=1432)

If you take it with an intention to save your lawful and halal income, then it is allowable in the case mentioned above.

Allah (Subhana Wa Ta’ala) knows Best

Darul Ifta,
Darul Uloom Deoband