{"id":27022,"date":"2024-07-17T00:33:42","date_gmt":"2024-07-16T19:03:42","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=27022"},"modified":"2025-10-24T15:38:21","modified_gmt":"2025-10-24T10:08:21","slug":"fo-income-taxation","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/fo-income-taxation\/","title":{"rendered":"Taxation of Share Transaction &#038;\u00a0Disclosing F&#038;O Income"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69cfd71b3182b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69cfd71b3182b\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Important_Points_for_Taxation_of_Share_Transaction_Disclosing_F_O_Income\" title=\"Important Points for Taxation of Share Transaction &amp;\u00a0 Disclosing F&amp;O Income\">Important Points for Taxation of Share Transaction &amp;\u00a0 Disclosing F&amp;O Income<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#F_O_Taxation\" title=\"F&amp;O Taxation\">F&amp;O Taxation<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Presumptive_taxation_Section_44AD_%E2%80%93_Risky_for_F_O_traders\" title=\"Presumptive taxation (Section 44AD) \u2013 Risky for F&amp;O traders\">Presumptive taxation (Section 44AD) \u2013 Risky for F&amp;O traders<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Set-off_and_carry-forward_rules_Section_71_%E2%80%93_F_O_loss_can_be_set_off_against\" title=\"Set-off and carry-forward rules (Section 71) &#8211; F&amp;O loss can be set off against:\">Set-off and carry-forward rules (Section 71) &#8211; F&amp;O loss can be set off against:<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#CBDT_Clarification_on_treatment_of_Share_Sale_as_Business_Income_or_Capital_Gains_Income\" title=\"CBDT Clarification on treatment of Share Sale as Business Income or Capital Gains Income\">CBDT Clarification on treatment of Share Sale as Business Income or Capital Gains Income<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Calculation_of_Turnover_from_F_O_Trades\" title=\"Calculation of Turnover from F&amp;O Trades\">Calculation of Turnover from F&amp;O Trades<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Deductible_Expenses\" title=\"Deductible Expenses:\">Deductible Expenses:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Other_Consideration\" title=\"Other Consideration \">Other Consideration <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Summary_Share_trading_or_F_O_transactions_Treatment\" title=\"Summary Share trading or F&amp;O transactions Treatment\">Summary Share trading or F&amp;O transactions Treatment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Equity_Capital_Gains_Tax_in_India_Across_the_world\" title=\"Equity \/ Capital Gains Tax in India &amp; Across the world\">Equity \/ Capital Gains Tax in India &amp; Across the world<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Important_due_dates_for_income_tax_for_FY_2023-24\" title=\"Important due dates for income tax for FY 2023-24\">Important due dates for income tax for FY 2023-24<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Income_tax_rate_in_case_of_capital_Gain_regulation_in_India\" title=\"Income tax rate in case of capital Gain regulation in India\">Income tax rate in case of capital Gain regulation in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Ready_Recknor_for_calculating_capital_gains_tax_for_all_class_of_Assets\" title=\"Ready Recknor for calculating capital gains tax for all class of Assets.\">Ready Recknor for calculating capital gains tax for all class of Assets.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/fo-income-taxation\/#Help_Need_%E2%80%93_Contract_us\" title=\"Help Need? &#8211; Contract us\">Help Need? &#8211; Contract us<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-24840\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/ITR-Filing-For-FO-Traders.jpg\" alt=\"ITR Filing For F&amp;O Traders\" width=\"1600\" height=\"805\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/ITR-Filing-For-FO-Traders.jpg 1600w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/ITR-Filing-For-FO-Traders-300x151.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/ITR-Filing-For-FO-Traders-1024x515.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/ITR-Filing-For-FO-Traders-768x386.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/ITR-Filing-For-FO-Traders-1536x773.jpg 1536w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/ITR-Filing-For-FO-Traders-800x403.jpg 800w\" sizes=\"(max-width: 1600px) 100vw, 1600px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Important_Points_for_Taxation_of_Share_Transaction_Disclosing_F_O_Income\"><\/span><span style=\"color: #000080;\"><strong>Important Points for <a href=\"https:\/\/carajput.com\/archives\/taxation-of-share-transaction-and-disclosing-fando-income.pdf\">Taxation of Share Transaction &amp;\u00a0 Disclosing F&amp;O Income<\/a><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>The income from these transactions should be reported under the head &#8220;Income from Business or Profession&#8221; in the Income Tax Return. Taxpayers engaged in these activities may be liable to pay advance tax if their tax liability exceeds \u20b910,000 in a financial year<\/li>\n<li>Income from Futures and Options (F&amp;O) transactions must be reported in ITR-3, whether the taxpayer is an individual, Hindu Undivided Family (HUF), or a company. ITR-3 is designed for individuals and HUFs having income from profits and gains of business or profession, which includes income from F&amp;O trading.<\/li>\n<li>F&amp;O income is considered business income and must be reported under the head &#8220;Profits and Gains from Business or Profession&#8221;. ITR-3 also allows you to report other incomes such as Salary income, Income from house property, Income from other sources (like interest income, dividends, etc.)<\/li>\n<li>If your total income exceeds a certain threshold, you may be required to maintain books of accounts and have them audited by a Chartered Accountant. You can deduct expenses directly related to your F&amp;O trading, such as brokerage fees, internet charges, and other related expenses. If your turnover from F&amp;O trading exceeds \u20b910 crore (from AY 2021-22) or you opt for the presumptive taxation scheme under section 44AD and your total income exceeds the basic exemption limit, you<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-24893\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/FO..jpg\" alt=\"FAQ on F&amp;O or Intraday trading income\" width=\"938\" height=\"577\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/FO..jpg 938w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/FO.-300x185.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/FO.-768x472.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/FO.-800x492.jpg 800w\" sizes=\"(max-width: 938px) 100vw, 938px\" \/><\/p>\n<h3 data-start=\"134\" data-end=\"182\"><span class=\"ez-toc-section\" id=\"F_O_Taxation\"><\/span><span style=\"color: #000080;\"><strong data-start=\"141\" data-end=\"182\">F&amp;O Taxation<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-30256\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/FO-Taxation-A-Complete-Guide-for-FY25.jpg\" alt=\"F&amp;O Taxation\" width=\"985\" height=\"1122\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/FO-Taxation-A-Complete-Guide-for-FY25.jpg 985w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/FO-Taxation-A-Complete-Guide-for-FY25-263x300.jpg 263w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/FO-Taxation-A-Complete-Guide-for-FY25-899x1024.jpg 899w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/FO-Taxation-A-Complete-Guide-for-FY25-768x875.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/FO-Taxation-A-Complete-Guide-for-FY25-800x911.jpg 800w\" sizes=\"(max-width: 985px) 100vw, 985px\" \/><\/p>\n<p data-start=\"184\" data-end=\"224\"><span style=\"color: #000080;\"><strong data-start=\"189\" data-end=\"224\">Classification of F&amp;O income<\/strong><\/span><\/p>\n<ul data-start=\"225\" data-end=\"401\">\n<li data-start=\"225\" data-end=\"302\">\n<p data-start=\"227\" data-end=\"302\">Treated as non-speculative business income (unlike intraday trading).<\/p>\n<\/li>\n<li data-start=\"303\" data-end=\"347\">\n<p data-start=\"305\" data-end=\"347\">Allows broader loss set-off options.<\/p>\n<\/li>\n<li data-start=\"348\" data-end=\"401\">\n<p data-start=\"350\" data-end=\"401\">Taxable at slab rate \u2014 not under capital gains.<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"408\" data-end=\"451\"><span style=\"color: #000080;\"><strong data-start=\"413\" data-end=\"451\">How is F&amp;O turnover calculated?<\/strong><\/span><\/p>\n<p data-start=\"452\" data-end=\"484\">As per ICAI 2023 guidance: Turnover = Absolute sum of profit\/loss + Premiums on options sold<\/p>\n<p data-start=\"558\" data-end=\"570\">Example:<\/p>\n<div class=\"_tableContainer_1rjym_1\">\n<div class=\"group _tableWrapper_1rjym_13 flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" style=\"height: 171px;\" width=\"802\" data-start=\"571\" data-end=\"779\">\n<thead data-start=\"571\" data-end=\"618\">\n<tr data-start=\"571\" data-end=\"618\">\n<th data-start=\"571\" data-end=\"590\" data-col-size=\"sm\">Transaction Type<\/th>\n<th data-start=\"590\" data-end=\"606\" data-col-size=\"sm\">Profit\/(Loss)<\/th>\n<th data-start=\"606\" data-end=\"618\" data-col-size=\"sm\">Turnover<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"668\" data-end=\"779\">\n<tr data-start=\"668\" data-end=\"699\">\n<td data-start=\"668\" data-end=\"678\" data-col-size=\"sm\">Options<\/td>\n<td data-col-size=\"sm\" data-start=\"678\" data-end=\"688\">INR 30,000<\/td>\n<td data-col-size=\"sm\" data-start=\"688\" data-end=\"699\">INR 30,000<\/td>\n<\/tr>\n<tr data-start=\"700\" data-end=\"737\">\n<td data-start=\"700\" data-end=\"710\" data-col-size=\"sm\">Futures<\/td>\n<td data-col-size=\"sm\" data-start=\"710\" data-end=\"724\">(INR 1,00,000)<\/td>\n<td data-col-size=\"sm\" data-start=\"724\" data-end=\"737\">INR 1,00,000<\/td>\n<\/tr>\n<tr data-start=\"738\" data-end=\"779\">\n<td data-start=\"738\" data-end=\"750\" data-col-size=\"sm\">Total<\/td>\n<td data-col-size=\"sm\" data-start=\"750\" data-end=\"762\">(INR 70,000)<\/td>\n<td data-col-size=\"sm\" data-start=\"762\" data-end=\"779\">INR 1,30,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h4 data-start=\"786\" data-end=\"857\"><span class=\"ez-toc-section\" id=\"Presumptive_taxation_Section_44AD_%E2%80%93_Risky_for_F_O_traders\"><\/span><span style=\"color: #000080;\"><strong data-start=\"791\" data-end=\"857\">Presumptive taxation (Section 44AD) \u2013 Risky for F&amp;O traders<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ul data-start=\"858\" data-end=\"1006\">\n<li data-start=\"858\" data-end=\"949\">\n<p data-start=\"860\" data-end=\"949\">Some traders claim 44AD presumptive scheme \u2014 but tax department has issued notices.\u00a0Safer to report actual profits and file ITR-3.<\/p>\n<\/li>\n<\/ul>\n<h4 data-start=\"1013\" data-end=\"1069\"><span class=\"ez-toc-section\" id=\"Set-off_and_carry-forward_rules_Section_71_%E2%80%93_F_O_loss_can_be_set_off_against\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1018\" data-end=\"1069\">Set-off and carry-forward rules (Section 71) &#8211; <\/strong><strong data-start=\"1070\" data-end=\"1082\">F&amp;O loss<\/strong> can be set off against:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<div class=\"_tableContainer_1rjym_1\">\n<div class=\"group _tableWrapper_1rjym_13 flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" style=\"height: 192px;\" width=\"773\" data-start=\"1108\" data-end=\"1361\">\n<thead data-start=\"1108\" data-end=\"1147\">\n<tr data-start=\"1108\" data-end=\"1147\">\n<th data-start=\"1108\" data-end=\"1127\" data-col-size=\"sm\">Nature of Income<\/th>\n<th data-start=\"1127\" data-end=\"1147\" data-col-size=\"sm\">Set-off Allowed?<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"1188\" data-end=\"1361\">\n<tr data-start=\"1188\" data-end=\"1214\">\n<td data-start=\"1188\" data-end=\"1197\" data-col-size=\"sm\">Salary<\/td>\n<td data-col-size=\"sm\" data-start=\"1197\" data-end=\"1214\">Not allowed<\/td>\n<\/tr>\n<tr data-start=\"1215\" data-end=\"1270\">\n<td data-start=\"1215\" data-end=\"1257\" data-col-size=\"sm\">Business &amp; Profession (non-speculative)<\/td>\n<td data-col-size=\"sm\" data-start=\"1257\" data-end=\"1270\">Allowed<\/td>\n<\/tr>\n<tr data-start=\"1271\" data-end=\"1301\">\n<td data-start=\"1271\" data-end=\"1288\" data-col-size=\"sm\">House Property<\/td>\n<td data-col-size=\"sm\" data-start=\"1288\" data-end=\"1301\">Allowed<\/td>\n<\/tr>\n<tr data-start=\"1302\" data-end=\"1331\">\n<td data-start=\"1302\" data-end=\"1318\" data-col-size=\"sm\">Capital Gains<\/td>\n<td data-col-size=\"sm\" data-start=\"1318\" data-end=\"1331\">Allowed<\/td>\n<\/tr>\n<tr data-start=\"1332\" data-end=\"1361\">\n<td data-start=\"1332\" data-end=\"1348\" data-col-size=\"sm\">Other Sources<\/td>\n<td data-col-size=\"sm\" data-start=\"1348\" data-end=\"1361\">Allowed<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<p data-start=\"1363\" data-end=\"1438\">File ITR on or before due date (u\/s 139(1)) to carry forward losses.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"CBDT_Clarification_on_treatment_of_Share_Sale_as_Business_Income_or_Capital_Gains_Income\"><\/span><span style=\"color: #000080;\"><strong>CBDT Clarification on treatment of Share Sale as Business Income or Capital Gains Income<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.caindelhiindia.com\/blog\/category\/cbdt\/\">CBDT Clarification<\/a>: Income Taxpayers can choose to treat income from listed shares as either business income or capital gains. Once chosen, the treatment must be consistent in subsequent years unless circumstances change significantly. The chosen method will be accepted by the Assessing Officer (AO), reducing disputes.<\/li>\n<li>the<a href=\"https:\/\/www.caindelhiindia.com\/blog\/category\/cbdt\/\"> CBDT<\/a> Circular No. 6\/2016 (Dated 29 February 2016) : Business Income: If the taxpayer treats listed shares as stock-in-trade, income will be treated as business income, irrespective of holding period. &amp;\u00a0 Capital Gains: If treated as capital gains, the AO will not dispute the classification for shares held over 12 months.<\/li>\n<li>Non-Speculative Nature of F&amp;O Transactions: According to Section 43(5)(d) of the Income Tax Act: Transactions in trading of derivatives (as per clause (ac) of Section 2(20) of the Securities Contracts (Regulation) Act, 1956) carried out on a recognized stock exchange are not deemed speculative. This means F&amp;O transactions are classified as non-speculative business income, not speculative.<\/li>\n<li>Treatment of Unlisted Shares: Income from the transfer of unlisted shares is taxed under &#8216;Capital Gains&#8217; regardless of the holding period, as per CBDT circular dated 2 May 2016, to avoid disputes.<\/li>\n<li>Potential Reclassification: There is market speculation that the government may consider reclassifying F&amp;O turnover from non-speculative business income to speculative income. This would have significant implications for how these transactions are taxed and reported.<\/li>\n<\/ul>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-25648\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/FO-Transaction-44AD.jpg\" alt=\"F&amp;O Transaction &amp; 44AD\" width=\"941\" height=\"1129\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/FO-Transaction-44AD.jpg 941w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/FO-Transaction-44AD-250x300.jpg 250w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/FO-Transaction-44AD-853x1024.jpg 853w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/FO-Transaction-44AD-768x921.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/06\/FO-Transaction-44AD-800x960.jpg 800w\" sizes=\"(max-width: 941px) 100vw, 941px\" \/><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Calculation_of_Turnover_from_F_O_Trades\"><\/span><span style=\"color: #000080;\"><strong>Calculation of Turnover from F&amp;O Trades<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><span style=\"color: #000080;\"><strong>Previous Method:<\/strong> <\/span>Earlier, the turnover was computed as the sum of the absolute profit and the premiums earned from options writing.<\/li>\n<li><span style=\"color: #000080;\"><strong>New Method (from AY23)<\/strong><\/span>\u00a0 Absolute Profit method : The total of all profits and losses from F&amp;O trades, where losses are also added to the profits to calculate the total turnover.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Deductible_Expenses\"><\/span><span style=\"color: #000080;\"><strong>Deductible<\/strong> Expenses:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Taxpayers can claim deductions for expenses related to F&amp;O business, such as: Brokerage fees, Interest on loans availed for trading, Electricity costs, Internet charges.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Other_Consideration\"><\/span><span style=\"color: #000080;\"><strong>Other Consideration <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Typically, you will need to use ITR-3 for reporting income from F&amp;O trading as business income. Keep detailed records of all transactions, including profits, losses, and all related expenses. If the total turnover exceeds the specified limit, an audit may be required under Section 44AB of the Income Tax Act.<\/li>\n<li>Ensure accurate calculation of total turnover, deductible expenses, and net income from F&amp;O trading for correct tax liability assessment. Follow the prescribed method for calculating turnover and ensure consistent reporting across assessment years.<\/li>\n<li>If the F&amp;O transactions are considered as a business, the taxpayer is required to maintain proper books of accounts as per the provisions of the Income Tax Act. If the turnover exceeds the prescribed limit under Section 44AB, the accounts must be audited by a Chartered Accountant. Under Section 44AD, taxpayers with a turnover of up to INR 2 Cr can opt for presumptive taxation and declare 6% or 8% of the turnover as income, provided they are eligible and not engaged in speculative transactions.<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-27023\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/capital-gain.jpg\" alt=\"capital gain\" width=\"801\" height=\"1387\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/capital-gain.jpg 700w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/capital-gain-173x300.jpg 173w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/capital-gain-591x1024.jpg 591w\" sizes=\"(max-width: 801px) 100vw, 801px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Summary_Share_trading_or_F_O_transactions_Treatment\"><\/span><a href=\"https:\/\/carajput.com\/archives\/taxation-of-share-transaction-and-disclosing-fando-income.pdf\"><span style=\"color: #000080;\">Summary Share trading or F&amp;O transactions Treatment<\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table>\n<thead>\n<tr>\n<td><span style=\"color: #000080;\"><strong>Criteria<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>\u00a0<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Business Income<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Capital Gains<\/strong><\/span><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><strong>Volume\/Frequency<\/strong><\/td>\n<td><\/td>\n<td>High (e.g., day trading, F&amp;O trading)<\/td>\n<td>Low to moderate<\/td>\n<\/tr>\n<tr>\n<td><strong>Intent<\/strong><\/td>\n<td><\/td>\n<td>Short-term profit<\/td>\n<td>Long-term investment<\/td>\n<\/tr>\n<tr>\n<td><strong>Expenses Deduction<\/strong><\/td>\n<td><\/td>\n<td>All business-related expenses<\/td>\n<td>Transfer-related expenses only<\/td>\n<\/tr>\n<tr>\n<td><strong>Tax Rate<\/strong><\/td>\n<td><\/td>\n<td>Normal slab rates<\/td>\n<td>15% (STCG), 10% on gains &gt; \u20b91 lakh (LTCG)<\/td>\n<\/tr>\n<tr>\n<td><strong>ITR Form<\/strong><\/td>\n<td><\/td>\n<td>ITR-3<\/td>\n<td>Typically ITR-2<\/td>\n<\/tr>\n<tr>\n<td><strong>CBDT Circular (Listed Shares)<\/strong><\/td>\n<td><\/td>\n<td>Option to choose, consistent in subsequent years<\/td>\n<td>Option to choose, consistent in subsequent years<\/td>\n<\/tr>\n<tr>\n<td><strong>Unlisted Shares<\/strong><\/td>\n<td><\/td>\n<td>Not applicable<\/td>\n<td>Always treated as capital gains<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"Equity_Capital_Gains_Tax_in_India_Across_the_world\"><\/span><span style=\"color: #000080;\"><strong>Equity \/ Capital Gains Tax in India &amp; Across the world<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-27123\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/equity-tax-aross-world-.jpg\" alt=\"What is Equity \/ Capital Gains Tax in India &amp; Across the world?\" width=\"993\" height=\"1141\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/equity-tax-aross-world-.jpg 993w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/equity-tax-aross-world--261x300.jpg 261w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/equity-tax-aross-world--891x1024.jpg 891w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/equity-tax-aross-world--768x882.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/equity-tax-aross-world--800x919.jpg 800w\" sizes=\"(max-width: 993px) 100vw, 993px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Important_due_dates_for_income_tax_for_FY_2023-24\"><\/span><span style=\"color: #000080;\"><strong>Important due dates for income tax for FY 2023-24<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-27040\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/Impt-Due-date.jpg\" alt=\"Important due dates for income tax for FY 2023-24\" width=\"1067\" height=\"1540\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/Impt-Due-date.jpg 887w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/Impt-Due-date-208x300.jpg 208w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/Impt-Due-date-710x1024.jpg 710w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/Impt-Due-date-768x1108.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2024\/07\/Impt-Due-date-800x1154.jpg 800w\" sizes=\"(max-width: 1067px) 100vw, 1067px\" \/><\/h3>\n<p>&nbsp;<\/p>\n<p>Popular blog:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Income_tax_rate_in_case_of_capital_Gain_regulation_in_India\"><\/span><a href=\"https:\/\/carajput.com\/publications\/income-tax-rate-in-case-of-capital-gain-regulation-in-india.pdf\" data-cke-saved-href=\"https:\/\/carajput.com\/publications\/income-tax-rate-in-case-of-capital-gain-regulation-in-india.pdf\"><strong>Income tax rate in case of capital Gain regulation in India<\/strong><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h3><span class=\"ez-toc-section\" id=\"Ready_Recknor_for_calculating_capital_gains_tax_for_all_class_of_Assets\"><\/span><a href=\"https:\/\/carajput.com\/publications\/ready-recknor-for-calculating-capital-gains-tax-for-all-class-of.pdf\" data-cke-saved-href=\"https:\/\/carajput.com\/publications\/ready-recknor-for-calculating-capital-gains-tax-for-all-class-of.pdf\"><strong>Ready Recknor for calculating capital gains tax for all class of Assets.<\/strong><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><span style=\"color: #000080;\"><a style=\"color: #000080;\" href=\"https:\/\/carajput.com\/publications\/all-the-provision-of-taxation-of-income-from-capital-gains.pdf\">All about the Income taxation on capital gain<\/a><\/span><\/li>\n<li><span style=\"color: #000080;\"><a style=\"color: #000080;\" href=\"https:\/\/carajput.com\/archives\/summary-of-provision-of-capital-gains-charts-under-the-income-tax-1961.pdf\">Provision-of-capital-gains-charts<\/a><\/span><\/li>\n<li><a href=\"https:\/\/carajput.com\/publications\/all-the-provision-of-taxation-of-income-from-capital-gains.pdf\">All about the Income taxation on capital gain<\/a><\/li>\n<li><a href=\"https:\/\/carajput.com\/archives\/summary-of-provision-of-capital-gains-charts-under-the-income-tax-1961.pdf\">Provision-of-capital-gains-charts<\/a><\/li>\n<li><a href=\"https:\/\/carajput.com\/publications\/all-the-provision-of-taxation-of-income-from-capital-gains.pdf\">All about the Income taxation on capital gain\u00a0<\/a><\/li>\n<li><strong><a href=\"https:\/\/carajput.com\/publications\/all-the-provision-of-taxation-of-income-from-capital-gains.pdf\">All about the Income taxation on capital gain\u00a0<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/carajput.com\/blog\/delay-in-the-deposit-of-employer-provident-fund-during-lock-down-will-not-levy-any-penalty\/\">Delay in the deposit of Employer provident fund during the lockdown<\/a><\/strong><\/li>\n<li><a href=\"https:\/\/carajput.com\/blog\/get-aware-for-penalty-of-section-234f-for-late-filing-of-itr\/\"><strong>Aware of the penalty of Section-234f for late filing of ITR<\/strong><\/a><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Help_Need_%E2%80%93_Contract_us\"><\/span><span style=\"color: #000080;\">Help Need? &#8211; Contract us<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Rajput Jain and associates Professional are available to help you file your ITR return without any kind of hassle. We ensuring your foreign assets are accurately reported &amp; you comply with Indian tax regulations. For query or help, contact: <a href=\"mailto:singh@carajput.com\">singh@carajput.com<\/a>\u00a0or call at \u00a09555555480<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Important Points for Taxation of Share Transaction &amp;\u00a0 Disclosing F&amp;O Income The income from these transactions should be reported under the head &#8220;Income from Business or Profession&#8221; in the Income Tax Return. Taxpayers engaged in these activities may be liable to pay advance tax if their tax liability exceeds \u20b910,000 in a financial year Income &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[150],"tags":[10163],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/27022"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=27022"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/27022\/revisions"}],"predecessor-version":[{"id":30257,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/27022\/revisions\/30257"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=27022"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=27022"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=27022"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}