Is it permissible to claim zakat (charity) in tax return?

Question

Sometimes we get a receipt for whatever donation we do. It can be reimbursed when filing our tax returns. If I give zakat and get a receipt and claim it in the tax return, is it OK to do so?

Also can i use the claimed Zakat for my personal use?

For example: I am due to pay Zakat of $500. Now if i claim this $500 in my tax return, i will get them reimbursed. Now lets say my total tax refund was $800. Now out of this $800, i know that $500 are the one that i claimed for Zakat. Now if i want to buy something worth $800 for myself, lets say TV or Refrigerator, can i do that?

Answer 1

It is important to note that a tax refund is exactly that: a refund. This isn't a case of the government giving you money, or reducing your zakat donations, this is just the government returning your own money back to you.

The way income taxes work, at least in my country (i.e. Canada), is that the government takes a portion of every paycheque as advance payment toward your income tax. However, they don't know how much income tax they will actually charge you until after you've filed your tax return. Therefore, these deductions may add up to more, or less, than what they actually end up charging you.

If these deductions didn't occur, then your taxes would more accurately look like this:

• Without deducting zakat, you owe the government $5,000.
• While deducting zakat, you might owe the government $4,800. (Note this is a deduction, not a credit, so you don't get back a dollar-for-dollar match, but the amount you give in zakat does lower your AGI, contributing to the lower tax.)

What you pay in zakat is completely separate from what you pay the government, they just decide to charge you less if you've made a tax-deductible charitable donation: In effect, they're just agreeing that (a portion of) the money you used for charitable purposes (i.e. zakat) is as good a use of your money as what they would've done with it instead.

The money you paid in zakat is still considered zakat. Any money the government refunds you is just your own money that they were holding on to, which you can do with as you please.

Answer 2

Exactly as everybody's answers. In short, claiming zakat means we are not paying the government any tax for the amount of the zakat.

When you say the money return you received is part of the 500 dollars zakat, that is totally incorrect. The 800 dollars return is from the total tax you paid to the government (you know that the government took a portion amount of money out of your paycheck right?) And you are claiming back these money. It has nothing to do with the zakat money.

Claiming zakat or donations means we are telling the government that we are not paying taxes for the amount we donated.

For example, if you pay zakat or a charity for 500 dollars, you will pay 0 dollars to the government because you don't have to pay tax on donations.

On the other hand, if you decided not to pay any zakat or made any charity contribution for that year then you would have to pay the government tax on that 500 dollars (X% of that 500) you keep or earn.

So remember to always claim your donations; otherwise, you are giving away free money to the government.

Claiming zakat in your tax return means you would either get a refund or pay less on your taxes depends on how your employer deduct the taxes from your paycheck. (if 0 dollar deduction from your paycheck, you most likely have to pay taxes, so better if you pay in advance like you are currently doing since you are receiving a refund) And you know right that the refund is the money they took out from your paycheck you earned from your hardwork and you get a refund because you have been paying too much extra taxes to the government. Thus, this is another story on taxes.