Tax on F&O and Intraday Trading in India: Income Head, Turnover, Audit, ITR and Loss Set-Off

F&O and intraday trading have become very common among salaried individuals, professionals, business owners and active market participants. However, the tax rules on F&O and intraday trading are often misunderstood while filing the income tax return.

Many taxpayers wrongly report F&O income as capital gains, ignore tax audit applicability, claim intraday losses incorrectly, or file the wrong ITR form. These mistakes may result in defective return notices, denial of loss carry-forward, mismatch with AIS/TIS, or further income tax proceedings.

This article explains the tax treatment of F&O and intraday trading in India, including income head, turnover calculation, tax audit, expenses, ITR form, loss set-off and practical compliance points.