CA Reveals Tax Mistakes for F&O Traders to Avoid Notices

Imagine you're trading in the stock market, specifically in options and futures.

The money you make from this is considered business income, not the same as regular investments.

It's important to know that when calculating your taxes, your total trading activity (profit and loss) is your 'turnover', which is used to determine if you need an audit.

You can't simply say you made a small percentage of your turnover.

If you lose money trading, you can still use those losses to reduce your taxes later on other income, like from another business or investments, but only if you file correctly.

For example, if you lost money in trading but earned money from investments, you only pay taxes on the remaining amount.

If you're involved in options and futures trading, you should file taxes using form ITR-3.