Should I sell my debt MF before three years? | Value Research You may redeem your investment before the completion of three years. Since you fall in the 10 per cent tax slab, it will help you to save taxes
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Should I sell my debt MF before three years?

You may redeem your investment before the completion of three years. Since you fall in the 10 per cent tax slab, it will help you to save taxes

As a tax payer in the income tax slab of 10%, is it sensible to hold a debt fund for long term as the long term capital gains are taxed at 20% with indexation. Will it not be better to sell it in the short term and pay the applicable tax rate of 10%?
- Pradeep Kumar Arora

You may redeem your investment before the completion of three years. Since you fall in the 10 per cent tax slab, it will help you to save taxes. If you redeem after three years, you will have to pay 20 per cent tax with the indexation benefit.

Applicable to investor falling in 10% tax slab rate

Redemption before completion of 3 years
Purchase price01/08/201110000
Redemption01/06/201417000
Short Term Capital Gain7000
[email protected] Marginal tax rate0.1700
Redemption after completion of 3 years
Purchase price01/08/201110000
Redemption01/10/201417000
Long Term Capital Gain7000
Cost of index2010-11711
2013-14939
Indexed purchase price13207
Long Term Capitla Gain3793
[email protected] 20% with indexation

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