Corporation Tax on the interest from the interest
Question
Further to your fatwa entitled Can interest money be used for income or corporation tax, I have a question. There is corporation tax due on profits of the company including on the interest money the bank provides. There could also be income tax on the interest in a personal bank account depending on the amount. Can the tax that is due on the interest amount be paid from the interest itself? Does it make a difference if the bank is state owned or not?
بسم الله الرحمن الرحیم
Answer
Any tax due on the accumulated interest can be paid from the interest, whether the bank is owned by the state or otherwise.
قال السرخسي في شرح السير الكبير (ص ١١١٦): وما حصل بسبب خبيث فالسبيل رده، انتهى. وقال في المبسوط (١٢/١٧٢): والسبيل في الكسب الخبيث التصدق. وقال (٢٢/٦١): فإن ربح في ذلك، رد الربح على من أخذه منه إن كان يعرفه، لأنه أخذه منه بسبب فاسد، فيستحق رده عليه، وإن كان لا يعرفه تصدق به، لأنه حصل له بكسب خبيث، انتهى۔
Allah knows best
Yusuf Shabbir
25 Ramadan 1446 / 25 March 2025
Approved by: Mufti Shabbir Ahmed and Mufti Muhammad Tahir
