Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Im an It Professional.From my salary every month nearly 4,000 rupees get deducted as income tax.
My collegues advice me to take up some policy or loan exempt from tax.Policies and loans have aqfactor of riba assaociated with it.Please let me know what Islam tell us regarding this.My concern is ,i dont want to get into somtething that Allah subhanawatalah doesnt like.Kindly reply on priorty bases. 

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Answer:

Tax and riba

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 274-276:

But those who devour ‘riba’ become like the one whom Shaitaan has bewitched and maddened by his touch. They have been condemned to this condition because they say, “Trade is just like ‘riba”, whereas Allah has made trade halaal and ‘riba’ haraam. Henceforth, if one abstains from taking ‘riba’ after receiving this admonition from his Lord, no legal action shall be taken against him regarding the ‘riba’ he had devoured before: his case shall ultimately go to Allah. But if one repeats the same crime even after this, he shall go to Hell, where he shall abide for ever! Allah deprives ‘riba’ of all blessing and develops charity, and Allah does not like an ungrateful, sinful person.

Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:

O Believers!, fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!

Allah says in the Holy Quran Chapter 4 Surah Nisa verse 161:

That they took ‘riba’, although they were forbidden. And that they devoured men’s substance wrongfully. We have prepared for those among them who reject faith a grievous punishment (of Hell Fire)!

Allah Says in the Holy Quran Chapter 3 Surah Ale-Imraan verses 130-132:

130 O ye who believe! Devour not ‘riba’ doubled and multiplied; but fear Allah; that ye may (really) prosper.

131 Fear the Fire which is prepared for those who reject faith.

132 And obey Allah and the Messenger; that ye may obtain mercy.

Allah Says in the Holy Quran Chapter 30 Surah Rome verse 39:

39 That which ye lay out for ‘riba’ through the property of (other) people will have no increase with Allah: but that which ye lay out for charity seeking the Countenance of Allah (will increase): it is these who will get a recompense multiplied.

Allah Says in the Holy Quran Chapter 2 Surah Baqarah verse 276:

276 Allah will deprive ‘riba’ of all blessings, but He will give increase for deeds of charity: for He loveth not creatures ungrateful and wicked.

Al-Tirmidhi Hadith 2829 Narrated by Ali ibn AbuTalib

Ali said he heard Allah's Messenger (saws) invoke the curse of Allah on those who took usury, those who paid it, those who recorded it, and those who refused to give sadaqah.

Dear and beloved sister in Islam, every single type, derivation, and manifestation of ‘riba’ (including usury, interest, etc.) is absolutely and categorically forbidden for the believers who sincere believe, trust, fear, and have faith in Allah and the Last Day…..thus let no one convince you otherwise!

Your Statement: My collegues advice me to take up some policy or loan exempt from tax.Policies and loans have aqfactor of riba assaociated with it.Please let me know what Islam tell us regarding this.

Beloved Sister, you are well within your rights to seek any lawful way or method to minimize your payment of income tax in the land you live in….. but to merely save an amount of IRS 4,000.00 (or even if it were all the wealth and treasure this world could hold!), it would be little recompense and an evil exchange to the eternal Fire of Hell which is promised to those who consume from the abomination of ‘riba’!!!

If there is absolutely no other lawful way in the law of the land you live in to save on your income tax except through the indulgence of ‘riba’, we absolutely assure you in the Blessed Name of Allah, it would be safer to pay the tax rather than indulge in the ‘haraam’ and take upon oneself the Unbearable Wrath and Anger of the Lord Most Majestic, Most Supreme!

If one trusts, obeys, and follows the guidance and commands of Allah and His Messenger (saws), one can be assured of never ever being misled; but if one believes, obeys and follows any other guidance, other than that of Allah and His Messenger (saws), one can be assured of being led astray.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan