What is the ruling on financial penalties in Islam?

The majority of scholars are of the opinion that discretionary punishment (ta'zir) by confiscating money is impermissible, as it could become a pretext for unlawfully seizing people's wealth.

Shaykh al-Islam Ibn Taymiyyah and his student Ibn al-Qayyim disagreed with this view. They held the opinion that discretionary punishment by confiscating money is permissible if rulers deem it beneficial and a deterrent for oppressors, and they refuted the claim of abrogation. They presented several pieces of evidence to support its permissibility, among them: the Prophet's (peace be upon him) allowance for confiscating the belongings of one who hunts within the sacred precinct of Medina; his order to break wine barrels and tear open their containers; his order to burn two saffron-dyed garments; his doubling the fine for one who stole from an unsecured place; the demolition of Masjid al-Dirar (the Mosque of Harm); and his prohibition of a murderer from inheritance and bequest.

Shaykh al-Islam divided financial penalties into three categories: 1. Destruction (Itlaf): This involves destroying the instruments of forbidden acts, such as idols, musical instruments, wine containers, and heretical books. 2. Alteration (Taghyir): This includes breaking counterfeit currency and changing curtains that contain images. 3. Transfer of Ownership (Tamlik): This involves confiscating stolen hanging dates or adulterated saffron and giving them, or their monetary value, as charity.