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Wednesday, November 11, 2009

Studying Tax Law and Calculating Interest on Loans

A: I am student of tax law. I had spoken to ulema about this and they said that tax is one of the fields in law which is Halaal. In my course we have to deal with aspects such as companies taking loans and want to know whether the interest they pay is deductable or not. In practice would me making such determinations be halaal or haram?

Studying tax laws or matters related to interest is permissible. Likewise working out the calculations of interest on loans, or the system of charging interest on loans, etc is not haraam. The sin is to actually do these wrongs such as earning interest or witnessing a transaction of interest. However, if a particular study will eventually lead to working in a company that indulges in interest, or working in a department that authorises interest based loans, then it will not be permissible to pursue such a degree. The permissibility we mentioned above applies to studies wherein part of the course is to learn interest-related matters and accounting. So Muslim students need to explain the Ulema the exact nature of the course they are pursuing, as well as the outcome of such studies in relation to work and jobs.
Mufti Siraj Desai