Quick answer
How do F&O traders file their taxes?
F&O income is non-speculative business income, so you file ITR-3, by 31 August without an audit or 31 October with one. A tax audit is needed above ₹10 crore turnover, and losses carry forward for 8 years only if you file on time.
How trading income is taxed
| Type of trading | Treated as | Losses can be set off against |
|---|---|---|
| Futures and options (F&O) | Non-speculative business income, taxed at slab rates | Other income in the same year (except salary), then carried forward for 8 years against business income |
| Intraday equity | Speculative business income, taxed at slab rates | Only speculative income, carried forward for 4 years |
| Delivery-based shares | Capital gains (see our capital gains page) | Capital gains only |
Losses carry forward only if you file on time. For traders without a tax audit, the due date is now 31 August. With a tax audit, it is 31 October.
Working out your trading turnover
Turnover for traders is not the value of your trades. Under the ICAI guidance note, F&O turnover is the total of your profits and losses on each trade, all added as positive numbers. Intraday turnover is worked out the same way. This number decides whether you need a tax audit, so it has to be right.
Do you need a tax audit?
- Turnover above ₹10 crore: a tax audit is required.
- Turnover up to ₹10 crore: usually no audit, even with a loss. The exception is if you used presumptive taxation (section 44AD) in any of the last five years and now declare a lower profit while your income is above the basic exemption limit.
We check your history before filing, and arrange the tax audit with our associate practising Chartered Accountant if one is needed.
Expenses you can claim
- Brokerage, exchange charges and securities transaction tax (STT)
- Internet and phone, for the part used for trading
- Subscriptions to trading tools, data and advisory services
- Depreciation on your computer and trading equipment
- Interest on money borrowed for trading
What we do
- Collect your tax P&L and ledger from Zerodha, Upstox, Groww, Angel One or any broker.
- Work out turnover for F&O and intraday separately, and check the audit position.
- Prepare a simple profit and loss account and balance sheet, which ITR-3 needs.
- Set off and carry forward losses correctly, and track them for future years.
- File ITR-3 on time and calculate advance tax for profitable years.
What clients say
Silvia Consulting is doing excellent work in tax filling. Jerome has helped me to file ITR 3 with ease and explained me all the doubts I asked.
I had an excellent experience with Silvia Consulting for filing my tax return. The entire process was completed very quickly, and their team handled everything with great care and professionalism. They explained every step clearly, answered all my questions patiently, and made the entire experience smooth and hassle-free.
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Common questions
I made a loss in F&O. Do I still need to file?
Yes, if you want to carry the loss forward. A loss reported in a return filed by the due date can reduce your tax on trading profits for the next 8 years.
Can I file ITR-2 for F&O?
No. F&O and intraday income is business income, so ITR-3 is needed. Filing the wrong form can lead to a defective return notice.
Is F&O loss allowed against my salary?
No. A business loss cannot be set off against salary income. It can be set off against other income such as interest or rent in the same year, and the rest is carried forward.
Do I need to pay advance tax on trading profits?
Yes, if your total tax for the year after TDS is more than ₹10,000. We work out the instalments with you.
Get a clear quote today
Send us a WhatsApp with a line about your situation. The first consultation is free, and we reply within one working day, usually the same day.