Answer
Wa `alaykum As-Salamu waRahmatullahi wa Barakatuh.
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
There is no basis that burning incense will drive away demons or evil spirits. Also there is no basis that writing the names of Allah on a piece of white paper then soaking it with water and letting a person drink it will protect a person from Satan and from evil things.
In his response to your question, Sheikh Ahmad Kutty, a senior lecturer and an Islamic scholar at the Islamic Institute of Toronto, Ontario, Canada, states,
Is Burning Incense Effective Against Evil Spirits?
There is no basis for the belief that burning incense will drive away demons or evil spirits. You can keep devils or evils away by seeking refuge and protection with Allah.
How to Seek Protection from Devils in Islam
The best means of doing so is by reading the Quran. The Prophet (peace be upon him) said, “Satan flees from a house where Surat Al-Baqarah is recited.” (Muslim)
The Prophet (peace be upon him) also advised us to read Al-Fatihah and the last three surahs of the Quran – before going to bed – as a sure protection from evil spirits.
Therefore, as a Muslim, you are encouraged to shun the belief that incense burning helps to keep the devils away.
Can Drinking Soaked Paper with Allah’s Names Repel Devils?
As for the second question about writing the names of Allah on a piece of paper and soaking it in water and drinking, it also has no basis in Islam.
We should keep away from such innovations and insist on following the prescribed way. Accordingly, we are to meditate on the beautiful names of Allah and establish dhikr. By doing so, we can ensure peace, protection and the blessings of Allah.
While saying this, I should also point out that we will not think of all these works when we are diligent in performing the Five Daily Prayers.
Once we establish the Prayers and complement them with the above prescriptions from the Prophet (peace be upon him), you can rest assured of the protection of Allah.
For more, see these fatwas:
Can a Person Who Says Adhkar Be Possessed by Jinn?
The World of Jinn and Its Secrets
Can Jinn Really Possess People?
Jinn Possession: Between Facts and Illusions
Is the Evil Eye Behind Our Sufferings in Islam? Ads by Muslim Ad Network
What Are the Virtues of Ayat Al-Kursi?
Allah Almighty knows best.