Paying taxes from bank interests
10-12-2006 | IslamWeb
Question:
salam alaykom,my Q is about the taxes on the bank interests,in the US the governement imposes like 25% minimum (sometimes 27%)on your whole money including the bank interests. u know that we r forced to take the minimum of interests here that we later give away. So let's say i have in the bank 1000$ and the interests are 10$ on september 30.Later on, the governement, on Dec 31 (the end of the year) will take let's say 25% which makes in this case 2.5$ from these interests. My Q is:should i give away the 10$ or the 7.5$ (i.e 10-2.5=7.5 $?? if i should give away the whole interests (without deducting the taxes) then i would be paying the taxes two times on a money that's not mine,the first time is when i remove this money and give it away (10$) and the second time is when they deduct the taxes of it at the end of the year (2.5$).what amount should i give away? salam alaykom
Answer:
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.
First of all, you should know that it is not permissible to deposit money in banks which deal with Ribaa (interest and / or usury) except for a necessity or a dire need. Therefore, if you are obliged to deposit your money in banks which deal with Ribaa, then you should deposit your money in a current account which does not involve any interest. If you must open a savings account which involves interest, in this case you are obliged to get rid of it [interest] by spending it on the general welfare of Muslims. The interest here is any money which exceeds the capital money. Allaah Says (what means): {…but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums).}[Quran 2: 279]. For more benefit, please refer to Fatwa 84007.
If the taxes are on the interest and taken from the interest, then you should get rid of whatever remains of it and you are not obliged to give away more than that.
However, if the taxes are on the capital money and you want to pay the taxes from the interest, then this is not permissible because you are obliged to get rid of this interest by spending it on the general welfare of Muslims but not on your needs unless you are poor and in dire need.
Allaah Knows best.