Using interest to pay taxes : interest and debit tax : [2]

Fatawa Question

[Question One] : Assalamu Alaikum Sheikh ! I’m Azam from Sri Lanka. One of my cousin brothers was trying to get the student visa to the UK. So in order to get the visa, he was asked to prove sponsorship. Since he is from an ordinary family, he borrowed some money from others and (Approx. Rs.3.5 million = US $ 35000) deposited in his Savings account in order to fulfill the sponsorship requirement. But unfortunately (As Almighty Allah’s wish), his visa application was rejected. And he returned all the money he borrowed. Same time he received a sum of Rs.20000 as interest. Also he is charged a debit tax of Rs.5000. As instructed by the Islamic scholars, he decided to spend the interest money in prescribed ways and not to use it for his own use. He has two doubts regarding this issue : * Can he deduct the debit tax from the interest he received ? (He suggests that the tax was charged not for his own money, so that it should be deducted) * Can he give the interest money as charity for his relative for cleaning work of their house premises ? (That particular relative is facing with financial difficulties) [Question Two] : Sorry for disturbing you very often. Thanks a lot for your last reply. This question is also related to the previous one. I think the debit tax is not on the generated, instead on the money we deposited. The government considers the money we deposited as an income and charges a debit tax. If it is so, is it allowed to deduct the tax from the interest ? In another scenario, in a conventional bank, if we withdraw more than Rs.20000 per month from our savings account, we’ll be charged a debit tax of 0.1 % on the amount we withdraw. In this case, Is it allowed to deduct the debit tax from the interest generated in the particular savings account. May Allah Bless U. Wa’salam. [Question Three] : Wa'alaikum Assalam Warahmatullahi Wabarakathuhu! Never mind the delay. Since it was the Holy month of Ramadan, I know you would have been fully occupied. However Jazakallahu Hairan for your reply. Belated Eid Wishes for you. Thakabbalallahu Minna Waminkum. Eid Mubarak. let me explain that scenario again... Say that I have a savings account in a conventional bank. And if my monthly withdrawal exceeds Rs.20000 / =, I'll be charged a debit tax of 0.1 % on the amount I withdrew. So is it allowed to set off the debit tax against the interest generated in the same account ?

Fatwa

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Publication Date

2007-10-16

Main Subjects

Economics & Business Administration
Islamic Studies

No. of Pages

3

Data Type

Fatawa

Language

English

Record ID

BIM-786670

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