Offsetting income tax with interest - Is this permissible?

Question

Assalamu Alaikum wa Rahmatullah.

Muhtaram Hazrat,

I am a govt employee in Bangladesh. My monthly salary is directly deposited in my personal account in a government bank as per office rule. My office deduct a certain amount of income tax before depositing my salary. At the end of the year, we calculate the total payable income tax and pay the remaning amount.

Based on the account's balance amount, the bank (government bank) give some interest on six monthly basis.

Is it permissible to adjust the interest paid by this governmental bank against the income tax payable by me?

wassalam.

Bilal Yusuf Pandor · Accepted Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

First and foremost, it is Haram to engage oneself in interest bearing transactions.

If the interest is accrued from a government owned bank, it is permissible to offset government-imposed income tax with that interest money.[1]

And Allah Ta’āla Knows Best

Bilal Yusuf Pandor

Student Darul Iftaa

Lusaka, Zambia

Checked and Approved by,
Mufti Ebrahim Desai

(2020-08-24)

Question

Answer

Related fatawa