Mufti Online — Madrasah Ta'leemuddeen

Taking an interest bearing loan to save oneself from paying tax

· 10 Dhuʻl-Qiʻdah 1443 AH1 min readEnglish

Question

A person deals mostly in cash and does not deposit in the bank in order to avoid showing too much income and paying exorbitant amounts of tax to the government. However, he cannot purchase large items such as properties and cars etc as it has to be done with "legal" money.

The only way out for him will be to take a loan from the bank in order for his purchases to be recognized legally. He will offset the interest payable with the interest he receives from his bank account.

Can this be a valid excuse to enter into an interest bearing loan with the bank?

Answer

Hazrat Jaabir (radhiyallahu anhu) reports that Rasulullah (sallallahu alaihi wasallam) cursed the one who consumes interest, pays interest, the scribe of the interest-bearing deal and the witness to such a deal.

After studying this hadeeth, you will be able to understand whether it is safer to take this type of a facility just to save yourself from tax or to abandon it.

And Allah Ta'ala (الله تعالى) knows best.

References (Arabic / Urdu sources)

یٰۤاَیّهَا الَّذِیۡنَ اٰمَنُوۡا لَا تَاۡکُلُوا الرِّبٰۤوا اَضۡعَافًا مُّضٰعَفَةً وَ اتَّقُوا اللّٰهَ لَعَلَّکُمۡ تُفۡلِحُوۡنَ (سورة آل عمران: ١٣٠)

الَّذِينَ يَأْكُلُونَ الرِّبٰوا لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ الَّذِي يَتَخَبَّطُهُ الشَّيْطنُ مِنَ الْمَسِّ ذَٰلِكَ بِأَنَّهُمْ قَالُوا إِنَّمَا الْبَيْعُ مِثْلُ الرِّبٰوا وَأَحَلَّ اللَّـهُ الْبَيْعَ وَحَرَّمَ الرِّبٰوا فَمَن جَاءَهُ مَوْعِظَةٌ مِّن رَّبِّهِ فَانْتَهٰى فَلَهُ مَا سَلَفَ وَأَمْرُهُ إِلَى اللهِ وَمَنْ عَادَ فَأُولَـٰئِكَ أَصْحٰبُ النَّارِ هُمْ فِيهَا خٰلِدُونَ ﴿البقرة: ٢٧٥﴾

عن جابر رضي الله عنه قال: لعن رسول الله صلى الله عليه وسلم آكل الربا، ومؤكله، وكاتبه، وشاهديه وقال: هم سواء (صحيح مسلم، الرقم: 1598)

عن عبد الله بن حنظلة غسيل الملائكة رضي الله عنه قال قال رسول الله صلى الله عليه وسلم درهم ربا يأكله الرجل وهو يعلم أشد من ستة وثلاثين زنية ( مسند أحمد، الرقم: 21957)

Answered by
Mufti Ebrahim Salejee (Isipingo Beach)
View original Compare with other Darul Iftas
Questions about this ruling, answered only from the archive with sources.

Where scholars differ, it’s safer to take the more cautious view.

Fatawa SA is an independent, read-only index of fatawa already published by Mufti Online — Madrasah Ta'leemuddeen. It is not a fatwa service. For your own situation, please ask a Mufti. Report an issue

For corrections or mistakes, please email us at fatawasa786@gmail.com.

Source: Mufti Online — Madrasah Ta'leemuddeen — https://muftionline.co.za/node/33152
Fatawa SA: https://fatawa.co.za/fatwa/muftionline-33152

People also ask

Is it permissible to avoid paying tax?

“According to the SARS (South African Revenue Service) website, the estate duty is 20% of an estate exceeding R3.5 million. If the estate is R30 million or more, the estate duty will be 25%.”

Ask Imaam · 137 fatawa from 7 Darul Iftas on this

What the Darul Iftas say

Related fatawa