Library / Income-tax Act, 2025: The Professional's Master Guide
52. Case Study 5: F&O Trader with Salary
Facts. Rohit, a salaried employee (salary Rs. 15,00,000, new regime), also trades. In Tax Year 2026-27 he has: loss from futures and options Rs. 6,00,000 (turnover Rs. 1.4 crore); intraday equity profit Rs. 50,000; short-term gain on delivery shares Rs. 1,00,000.
52.1 Step 1: classify
Activity | Nature | Result |
|---|---|---|
F&O on a recognised exchange | Non-speculative business | Loss Rs. 6,00,000 |
Intraday equity | Speculative business | Profit Rs. 50,000 |
Delivery shares held a few months | Capital gains (STCG under section 196) | Gain Rs. 1,00,000 |
52.2 Step 2: set off
F&O loss | (6,00,000) |
Set off against speculative profit (a non-speculative loss can absorb speculative income) | 50,000 |
Set off against STCG (other head; not against salary) | 1,00,000 |
Business loss to carry forward (8 years) | (4,50,000) |
52.3 Step 3: tax on salary
Salary less standard deduction (15,00,000 less 75,000) | 14,25,000 |
Tax: 20,000 + 40,000 + 15% of 2,25,000 (33,750) | 93,750 |
Cess 4% | 3,750 |
Tax payable | 97,500 |
Compliance. Rohit must file ITR-3 (business income) by 31 August 2027 (non-audit business case) to carry forward the loss. Tax audit is not required since his turnover of Rs. 1.4 crore is within Rs. 10 crore and his transactions are digital, and he is not opting for the presumptive scheme. The loss of Rs. 4,50,000 can be set off only against business income (including future F&O profits) for 8 years.
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