Zakat And Income Tax
Salam – According to Ghamidi sb. Zakat on income would be either 10% or 5% as explained in my next comment. 2.5% applies to yearly savings. State’s income tax should be accounted for Zakat, if you are already paying more towards income tax, that covers your Zakat. Thanks
We believe that the Islamic Shariah does not allow the state to impose taxes other than the zakah unless and until they expressly give the state the right to do so. The Holy Quran has not of course touched the issue of income tax and issues of application of the directives regarding the zakah and other financial matters. What we have to do is explain our understanding of the Quranic directives and exercise ijtihaad. Since the state has no authority to impose any other taxes when it does it violates the basic rights of the individual. When the government receives some amount in income tax while violating our rights we have in fact paid something which we did not owe the state. This leaves us with a right to consider the paid amount as the payable zakah. Therefore if one owes Rs 1500 in taxes and Rs 1000 in zakah he can only pay the taxes. This would mean he has paid the zakah. This is because the zakah is primarily collected by the state. In a nutshell, you can adjust your zakah against the amount paid to the state in respect of income tax or any other taxes for that matter.