AskImamDarul Iftaa Mahmudiyyah (AskImam)

Can interest earned on the bank account be used to offset bank charges (mainly govt taxes) for that same account or other accounts.

Fatwa 2052English
Finance and Commerce

Question

Note that all accounts are held with the same bank, eg. Personal Account, Company Account, Superannuation Account etc.

Answer

Interest monies must be given to the poor and needy who are eligible to accept Zakaat without the intention of reward. However, interest received from government institutes, eg. post office could be used to offset government taxes. Interest received from private banks cannot be used to offset taxes. It may be used to offset interest charged from the same bank.

and Allah Ta'ala Knows Best

Mufti Ebrahim Desai
FATWA DEPT.

Answered by
Mufti Ebrahim Desai
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