Offset of losses from derivatives trading

Given that remuneration taken from LLP is treated as business income, does it mean that a person can offset loss form derivatives trading with remuneration taken as a partner of LLP?


Partner Remuneration is treated as a business income in the hands of the partner. Loss from derivatives trading is a non-speculative business loss. Non-Speculative Loss can be set off in the current year against any income except Salary. Thus, it can be set off against remuneration income. The remaining loss can be carried forward for 8 years. You can read more about set-off and carry forward of loss here.

Hi…how to file losses from FNO in new itr 3 (p&L) for ay 2021-22

Hi @Shanmukh, you can declare your losses when filing your ITR to set off and carry them forward.

Now the option under ITR 3 is not allowing to enter negative number under business head in no books case…


I needed some clarity on taxes on F&O trading. I have a loss of around 5 Lacs in F&O and a gain of 3 Lacs from short term equity. I wanted to know if I can offset the 5 Lacs loss with 3 Lacs gain from equity? Will I need to pay 15% tax on short term gain or it can be offset with loss from F&O.

I also want to know do I need a tax audit if I want to carry forward the net loss of 2 Lacs.

If anyone can suggest me what is the applied case here and guide me which plan to opt on quicko for filing my return with this scenario, it will be really good.

Thank You

FY 2020-21
I have not opted for presumptive taxation. I have F&O loss. My total income excluding F&O loss is more than basic exemption limit. But, my turnover from F&O is not above 1 crore rupees (since all transactions are in non-cash mode, the limit is 5 crore rupees). Is tax audit applicable to me?
Continuing the above situation, what if my total income exclusing F&O loss is less than basic exemption limit?

Hi @NotAtAllSatwik,

In case the profit is below 6% of the turnover, and turnover below the threshold and total taxable income less than the basic exemption limit - tax audit it not applicable.

1 Like

Hi @himanshukoli,

You can set off F&O loss against capital gains.

You can carry forward the loss when filing your ITR

Hope this helps :slight_smile:

If you can share your contact details on Quicko | Contact Us our team will get in touch with you to understand your income situation and suggest the applicable plan, pricing and discounts

Now the option under ITR 3 is not allowing to enter negative number under business head in no books case…

Hey @Shanmukh, you can refer to these two articles that explain how to enter your trading income details:

Let us know if you have any other queries.

2 posts were merged into an existing topic: Importing Trading Data

Can I classify STCG gains as business income from this year onwards so last year FNO losses can be used to set of against current year short term gains.


Until last year, in my returns, STCG was classified under capital gains. From now on an not planning to get into fno.

Hey @yvjanard, yes, you can classify STCG as business income but it needs to be treated in the same manner in future years.

Thanks for your reply.

So, what I understood is,
Current year, STCG can be classified under business and can set off the current year STCG gains with last year’s FNO losses and continue classifying and categorising the LTCG under capital gains itself. Is business classified STCG non speculative business?

Hello @yvjanard,

Yes you are correct. Classification of trading in equity depends on the intentions of trader. If you intend to trade for investment purpose then it should be reported under capital gains (in your case- LTCG), similarly if you intend to trade for business purpose then you can report the same under business income.

Moreover, trading in equity shares (delivery) would be classified as non speculative business.

For better understanding you can also visit our article. Link is mentioned below.

Hope this helps!

I got FNO losses last year. Filed and reported in ITR3.
This year I got STCG gains and LTCG losses.
I want to consider STCG as business and set off against last year’s FNO losses and continue it to be business in the subsequent years. AND I want to continue to keep LTCG as capital gains category and continue to do so in future too.
Please let me know if that setup is possible?

Hey @yvjanard,

Yes, it is possible!

can we clasify stcg in speculative or non speculative buisness income as
speculative - intraday
non speculative - f&O
i am thinking of classifying it in speculative as they are cash market transactions

and also
how to show stcg in buisnees (just to take the stcg transactions and add it to the buissnes income)
eg speculatuve (intraday) -5l loss
stcg - 3l profit
so can i show speculative as 2l loss
thanks in advance for ur reply

mam non speculative is f&o whether
speculative is only intraday and cash equity transactions
so we should clasify stcg as speculative rather than non speculative

is my point correct as zerodha varsity also showing the same

thanks in advance for ur reply