Lying is a reprehensible and blameworthy characteristic and is not appropriate whether in earnest or in jest. There is no concession allowing it except in cases of necessity in order to achieve some definite shar‘i interest that cannot be attained by telling the truth, or to ward off serious harm that cannot be warded off by telling the truth. If it is possible to avoid lying and to tell the truth in order to obtain interests or ward off harm, then there is no concession that allows lying. 

Ahmad (17) narrated that Abu Bakr (may Allah be pleased with him) said: O people, beware of lying, for lying is contrary to faith.

Classed as saheeh by al-Albaani. See ad-Da‘eefah, 5/414 

It is narrated in a saheeh report from Sa‘d ibn Abi Waqqaas (may Allah be pleased with him) that he said: The Muslim could develop all sorts of characteristics except treachery and lying. 

And it is narrated in a saheeh report from Ibn Mas‘ood (may Allah be pleased with him) that he said: Lying is never appropriate in earnest or in jest. Then he recited the words of Allah (interpretation of the meaning): “Fear Allah, and be with those who are true (in words and deeds).” [at-Tawbah 9:119].

Narrated by Ibn Abi Shaybah, 8/403 

Muslim (2605) narrated from Umm Kalthoom bint ‘Uqbah that she heard the Messenger of Allah (blessings and peace of Allah be upon him) said: “He is not a liar who reconciles between people, saying good things and conveying good things.” 

Ibn Shihaab – one of the narrators of the hadeeth – said: I did not hear of any concession being granted concerning anything that people call lies except in three cases: War, reconciling among people, and what a man says to his wife or a woman says to her husband. 

Imam Ahmad (26731) narrated that Umm Kalthoom bint ‘Uqbah said: I never heard the Messenger of Allah grant a concession allowing any kind of lying except in three cases: a man who says something intending thereby to bring about reconciliation; a man who says something at the time of war; and a man talking to his wife or a woman talking to her husband.

Classed as saheeh by al-Albaani in as-Saheehah, 545 

The concession is granted only in these three cases and similar cases. In all other cases the lawgiver has not allowed any concession, so lying remains forbidden. 

Indeed what the Muslim should do, especially Muslims who live in kaafir societies, is to be keen to be honest and to avoid lying to the kaafirs, even more keen than he is to avoid lying to the believers, because his keenness to be honest and to connect that to the teachings of his religion, is a kind of practical da‘wah to the non-Muslims. If they see the noble characteristics that are promoted by Islam, that may lead to some of them entering the religion of Allah. 

But if the Muslim has the image of being a liar or treacherous or other blameworthy characteristics in front of non-Muslims, that will put him off the religion and make him resent its followers. 

For more information on cases in which it is permissible to tell lies, please see the answer to question no. 154955.

And Allah knows best.