Zakat on a provident fund when one is in debt

Question

Question: Zayd has one thousand rupees deposited in a provident fund (an employees’ savings fund) with the government, and this money is paid out on leaving the service; he also has a debt of seven hundred rupees. Will zakat now be wajib on this thousand rupees or not?

Answer

When he receives that money, zakat for the past will not be binding (lazim) on it, and in future there will be zakat on whatever remains over and above the debt.

Source: Fatawa Mahmudiyya

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