Need suggestions regarding my mutual fund investments

Hi Sir, May I know your investment objective(s)?  What do you mean by 'avail zero capital gains'??

What I mean is my short term capital gains tax would be zero since my total income is less than 2.5 lakhs (do not fall in tax bracket), but do I have to pay capital gains tax for redemption after 3 yrs?

Hi, If other income excluding short- term capital gains (if any) is less than basic exemption limit, you will be entitled to take the benefit of such shortfall in the basic exemption limit while calculating your tax liability.
Let me explain this through example.
Suppose your taxable income is Rs.300000 and STCG is Rs.80000 then the amount of deduction is = exemption limit- (taxable income-STCG)
=250000-(300000-80000)
= Rs.30000
So the amount of capital gain tax to be paid on Rs.50000 (80000-30000)
In case your taxable income including STCG is below exemption limit then you are not liable to any tax. Suggested reading: https://www.relakhs.com/mutual-funds-taxation-rules-capital-gains-tax-rates-on-mfs-fy-201516/ https://www.relakhs.com/set-off-carry-forward-capital-losses/

What I wanted to know is whether I have to pay capital gains tax of 20% with indexation on long term capital gains for debt funds if I'm falling below exemption limit of 2.5 lakhs.

Hi, It depends on if you other sources of income & the extent of LTCG amount as well. The LTCG can be adjusted against basic exemption limit only after adjusting all other income.  Kindly go through this good and comprehensive article on this topic : Adjust LTCG against the Basic Exemption limit & Save tax

Thanks Sreekant. The above article was very helpful. Keep up the good work of helping people be more informed.