1 week ago

Tax Rules Clarified for F&O Losses, HRA and Returns

F&O trading losses are treated as business losses.

They can generally be used against income from other sources, including gains from shares, but not salary.

Any leftover loss can be carried forward for up to eight years.

After the first year, it can be used only against future business income.

You may still receive HRA benefits if you rent your current home while owning a vacant home elsewhere.

This HRA benefit is available only under the old tax regime.

A tax rebate can make tax payable zero, but it does not remove the duty to file a return.

Someone whose gross income is above Rs 4 lakh under the new regime may need to file an ITR.

Key facts

F&O loss classification: F&O income or loss is classified as business income or loss under Section 43(5) of the Income Tax Act.
Set-off limit: No monetary limit is stated for setting off F&O losses against eligible income.
Salary exception: Business losses cannot be set off against salary income.
Carry-forward period: Unabsorbed business losses can be carried forward for eight years.
Future set-off: From the following year, carried-forward losses can be set off only against business income, not capital gains.
HRA condition: HRA exemption may apply when the taxpayer lives in rented accommodation, even if they own a house in another city.
Return-filing threshold: Under the new tax regime, gross income above Rs 4 lakh requires filing an ITR, even when a rebate eliminates tax payable.

financialexpress.com · 1 week ago