Income TaxFY 2026-27 (AY 2027-28)
F&O Trading Tax Calculator
Futures & Options income is non-speculative business income — taxed at slab rates with ITR-3. Includes audit applicability check.
Trading details
Marginal slab rate
F&O tax payable
₹1,40,400
Net P&L: ₹4,50,000
✓ No audit: Audit not mandatory
Gross P&L
₹5.00 L
Turnover
₹8.00 L
Net (after exp)
₹4.50 L
Tax @ slab
₹1.35 L
Cess
₹5.4 K
Total tax
₹1.40 L
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Section 43(5)(d) — Eligible derivative transactions are non-speculative business. Turnover for audit u/s 44AB is the absolute sum of profits and losses on each trade (per ICAI guidance).
FAQs
Frequently asked questions
Why is F&O business and not capital gains?+
Derivatives are settled by cash without delivery of underlying — Sec 43(5) explicitly classifies them as business. Hence ITR-3, slab rates, and full deduction of expenses (broker, internet, depreciation, advisory).
How is F&O turnover computed?+
Sum of |profit| + |loss| of each trade (NOT total contract value). Example: 3 trades with P&L of +50K, −20K, +10K → turnover = 80K. This is the threshold value for audit applicability.
Can F&O losses be carried forward?+
Yes — non-speculative business losses can be set off against any other head except salary in the SAME year, and carried forward for 8 years against business income only. Filing ITR by due date is mandatory.
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