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Q: Paying off Taxes with interest money

Can I utilise interest money to pay this tax? I am paying monthly tax as I am working for the government. My question simply is Now that I submitted my tax return I there is a deficit and the shortfall must be paid by me?

Answer:

There are two types of taxes:

1. Legitimate Tax
2. Illegitimate Tax

 

Legitimate Tax:

Tax that is justifiable, valid and not ridiculous is termed legitimate tax and has to be paid. Interest money cannot be used to pay this tax.

Illegitimate Tax:

Tax that is exorbitant and ridiculous is termed illegitimate tax. As far as utilizing interest money to pay this tax is concern, we state:

1. If the interest money accumulated was acquired from a government institution (e.g. Government Bank, Post Bank Account or Government Home Scheme etc), it will be permissible to utilize it in paying illegitimate government taxes. However, the entire tax amount cannot be paid with interest money. Only the access amount that is illegitimate could be paid with interest money.

2. If the interest money accumulated was acquired was an institution besides a government institution (e.g. Private Bank) then it will not be permissible to use the interest money to pay the illegitimate government taxes, as interest money is considered usurped wealth in light of Shari'ah. The ruling of usurped wealth is that it has to be returned to its owners (if known) or else given to the poor. It cannot be given to the government.

However, if government taxes are ridiculous and one is forced to utilize interest money (acquired from non government institutions) to pay government taxes as one does not have sufficient money, then as a situation of difficulty, some Ulama have issued permissibility to utilize interest money (acquired from non government institutions) to pay government taxes.
(Fatawa Rahimiyya, vol 9, pg 262, Darul Isha'at /
Ahsan Al-Fatawa, vol 7, pg 21, HM Sa'eed)

And Allāh Ta῾āla Knows Best

Checked and Approved by:

Mufti Ebrahim Desai

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