can I take a Home Loan? Will Shariah allow to take a Loan on interest in this kind of circumstances?
Question
I am a Computer Engineer from India. I pay around Rs. 3000 per month to Govt. as an Income Tax on my salary. I have not taken any LIC policy or loan. The best way to save the Tax is by taking the Home Loan, as I can save the tax on both interest as well as Principal amount that I pay every month.
Everybody, including my parents suggesting me to take a Home Loan, so that I can save the Tax and also invest my money on building a house for us. I know that taking money on interest is not allowed in Islam.
If I do not take a Loan, I need to pay the Income Tax (Rs. 3000 per month) and also, I cannot afford to construct a house, as I do not have that much amount with me.
Keeping the above mentioned things in consideration, can I take a Home Loan? Will Shariah allow to take a Loan on interest in this kind of circumstances?
Answer
Irrespective of what you can save by indulging in a Haraam transaction, payment of interest, etc. you will subject yourself to is Haraam. A homeloan for purposes of tax benefits is a lame excuse to indulge in something as serious as interest.
Our suggestion is that you search for an Islamic bank or any bank that is prepared to structure a deal for you according to Islamic principles. Such a deal will protect you from interest whilst offering you tax advantages at the same time.
and Allah Ta'ala Knows Best
Mufti Muhammad Kadwa
FATWA DEPT.
CHECKED & APPROVED: Mufti Ebrahim Desai (Fatwa Dept.)
- Answered by
- Mufti Muhammad Kadwa
Fatawa SA is an independent, read-only index of fatawa already published by Darul Iftaa Mahmudiyyah (AskImam). It is not a fatwa service. For your own situation, ask the issuing Darul Ifta directly.