Can I set-off F&O and intraday losses against other incomes?

I have losses in F&O in the last financial year. Can I use these losses to set-off my other incomes? I also missed reporting losses for FY 22-23 as I did not file an ITR. Can I report them now and set them off?

Losses from trading, if reported timely within the due date, can be used to set off your other incomes and can also be carried forward to future years.

For example, say you have short-term capital gains of ₹2L and face a loss of ₹3L from F&O. You can offset this loss against your capital gains, reducing your net taxable gains to zero. The remaining losses of ₹1L will be carried forward to the next year.

However, not all losses can be set off against all profits. There are some rules and restrictions:

  • Your F&O losses can be set off against all incomes (except salary) in the current FY. Once carried forward, they can only be set off against either F&O or intraday trading profits.
  • Intraday trading losses can only be set off against intraday gains both in the current and subsequent years.
  • Short-term losses from delivery-based trading can be set off against other short-term and long-term capital gains.
  • Long-term capital losses can only be set off against long-term capital gains.

Here’s a table that summarizes it all.

But, here’s something you should remember:

In order to carry forward your losses, you must file your ITR before the due date, which is 31st July of the relevant assessment year.

How to Calculate Turnover for F&O Trading 2024

For F&O trading, turnover is calculated as the sum of absolute values of profits and losses. So, you’ll just have to add all the profit and loss without taking the negative sign into consideration.

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