F&O tax and losses in India: the question pages

Profit or loss from futures and options in India is treated as non speculative business income, taxed at the slab rate and reported in ITR 3. The question pages below cover carry forward of losses, turnover and audit, STT and the full cost of a trade, each with dated sources.

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1Learn modules

Free lessons with a quiz and a certificate.

Free module 11.2Tax Treatment: MFs, ETFs, SGBs, Bonds & F&OI used to think all investments get the same tax treatment.

1Calculators

Put your own numbers on the idea.

CalculatorF&O costs and STTEvery statutory charge on a trade at the 2026 rates.

5Questions answered

One question, one short answer, a dated chart.

2Glossary terms

The words, in plain language.

F&O: Futures and Options. Derivative contracts used for hedging or speculation.
STT: Securities Transaction Tax. Levied on equity and equity-derivative trades on Indian exchanges: 0.1 percent on each side of a delivery trade in shares, 0.025 percent on.

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Questions about F&O tax and losses

How is F&O income taxed in India?

As non speculative business income, added to other income and taxed at the slab rate. Expenses tied to the trading can be claimed against it.

Which ITR form applies to F&O income?

ITR 3, the form for income from a business or profession. The question page explains the schedules involved.

Can F&O losses be carried forward?

Yes, for up to 8 assessment years, against business income only, provided the return is filed by the due date. They cannot be set off against salary.

Is STT a tax on profit?

No. STT is charged on the value of the trade, profit or loss. The STT pages and the F&O cost calculator show the charge per trade.

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