F&O and Intraday Trading Tax Rules in India

In India, profits from intraday trading and futures & options (F&O) trading are taxed differently.

Intraday trading is considered speculative business income, while F&O gains are non-speculative business income.

This affects which income tax return (ITR) form you use and when you need to file it.

For both types of trading, you must file ITR-3, but if you qualify, you can use ITR-4.

The deadline for filing is August 31, 2026, if a tax audit is not needed, or October 31, 2026, if it is.

Intraday trading profits are taxed at your regular income tax rate, and you need to keep financial records.

F&O traders must also keep books of accounts if their income or turnover is above certain limits.

Losses from intraday trading can only be offset against other speculative income and can be carried forward for up to four years if you file your ITR on time.