Taking a home loan to avoid tax
Q: Can we buy home loan to avoid income tax? Income tax is also indirect interest. Instead of paying it to the Government can we pay to bank as interest? or do we have an alternative to avoid it which benefits us?
A: If the loan is with interest then obviously it will be haraam.
And Allah Ta’ala (الله تعالى) knows best.
Read these QA to learn more..
- My questions is that can I take a home loan because home loan carry an interest that has to be paid on yearly basis, since we do not have a home and we are in need of home. I request you to look into this and reply as soon as possible?
- I am working in Multinational company. I am living in delhi and needs to relocate to Manesar, Gurgaon becuase my office is going there. Alhumdulillah earning good salary.. But I don’t have so much of Cash money to buy buy a home. I pay handsome tax per month approx 20,000 rupees.(As per our sharia we should not pay tax but since we are living in India so we pay it) I have two options to live there. 1. Live on Rent (I need to pay approximately 20,000 rupees per month) Still home will not be my own. 2. I take the Home Loan. I have done some calculation for home loan which is below. If i take home loan of 40 Lac rupees then i have to pay 18,000 rupees interest per month And taking home loan will save my per month tax of rupees 3,750 approx. So with Home loan option effectively i pay 18,000-3,750 = 14,250 rupees interest and after 15 years this home will be my own. Whereas if i don’t take home loan then i pay 20,000 rupees per month as rent and still this home will never be mine. Please consider this case alongwith Sharia and specially like we are livinig in India, paying tax.. In this case can we take home loan??? If not, please suggest what is the other option today’s muslim have because you know property rates have increased a lot, even i am earning 1 lac rupees i cannot buy a home. Jazaakumulllah…
- Is taking a home loan permissible?
- Assalamualaikum Iam working in a Company In INDIA. Mashaallah iam getting a good Salary. Income Tax Deduction is very high on my salary. Can i open PPF account , Can Take Home Loan(Iam residing on Rent here but in Delhi my father is having House)or can Invest in LIC,Mutual Fund , NSC etc. But all are giving certain percentage of amount after stipulated time period.So is it jayaz as per shariah to invest in these things.In home loan i have to pay the interest to the bank against the amount i loaned for taking home. Please Reply as soon as possible. Jazakallah Khair
- From your previous answers I came to know that taking home loan is not permissible as per Shariah. But my case is different. I am working in Bangalore and have taken home for rent. In my native we have own house which is made of sand (mitti) without basement and we are living in that more than 10 years. Now we are planning to construct the house. The issue is I do not have that much money to construct house in one shot. Since I am getting good salary, I can repay the loan. Without taking the loan and want to construct the house, for me it will take more than 8 years. In this case; (1) Can I take the home loan to construct the home in my native? (2) If it is permissible, then can I build two or three floor building and give it for rent? (3) From the rented money can I pay the home loan? (4) Since I am employee of a software company, can I show this home loan for tax redemption?
- I am in government service. My company deduct certain amount as income tax from my monthly salary. We are investing some amount in LIC,VPF etc for saving income tax, in which we get interest also. (VPF – Voluntary Provident Fund, after receiving salary we invest in it with our own company). In both the cases interest got credited to our accounts, which we normally gets after maturity. In VPF company credited interest to my account on monthly basis,while in LIC we got whole amount along with interest on maturity. My Questions: 1) Whether we can adjust interest due/received from LIC and VPF against the income tax deducted by the company? 2) Whether we can adjust income tax against interest received from any of the above source.(Either LIC or VPF) 3) Certain company allow its employees to deposit income tax at their own and produce a proof of deposit. In such a case, can I deposit the income tax of other person from the amount of Interest due to me and than taken back the same amount from him. Is it Ok? We have to pay huge amount as Income Tax, other persons are taking home loan on interest. Whatever a person repays loan interest to bank, government gives income tax benefits on it. In this situation can I take Home Loan and avoid income tax and pay Interest amount of the Loan from the Interest I am getting from my savings.