44AD business and F&O loss

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This discussion addresses how to declare losses from Futures & Options (F&O) trading when you've opted for presumptive taxation under Section 44AD for other business income. It clarifies that F&O losses must be declared under normal assessment with maintained books of accounts, separate from your 44AD declared income. The advice also covers calculating F&O turnover correctly for tax purposes and preparing a basic Profit & Loss statement and Balance Sheet.

Pratik Patel

Pratik Patel (Querist)

14 August 2025 Dear Sir/Madam,

I have received income and TDS deducted us 194C. I am putting this income under 44AD and show 10% profit. However, I have loss in F&O trading. now, if I will show F&O trading loss in the income form business profession under regular business income then does it make any problem? and have I to show loss directly under direct expenses head->other direct expenses ?
how to show balance sheet because 44AD showed only debtors and cash in hand as regulars books of accounts not maintained to file ITR-3. Now I am showing F&O loss then have to show balance sheet again the regular business income head ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

14 August 2025 You have to declare two businesses, one under sec. 44 AD while for F&O loss declaration you have to declare it under normal assessment with books of accounts maintained.

Pratik Patel

Pratik Patel (Querist)

14 August 2025 Thank you sir
Apart from this,
In option trading turnover is Rs.4,22,335/- and loss is Rs.2,59,491/-
Now I will show this loss in the regular business income under P&L as follow - sales - Rs.15,07,207/- , purchase - Rs.17,29,047/- , other expenses - Rs.37,651/- = Rs.2,59,491/- loss.
and make balance sheet showing capital and asset side bank balance and stock holding. ( As it is salaried person so first time going to make balance sheet)

Is all correct sir? or any changes?
Rs. is used only because while submitting getting error that mobile number used

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

14 August 2025 Yes, seems to be correct except the turnover should be sales value itself, but here two values are different.
To calculate turnover in Futures and Options (F&O) trading, sum the absolute values of profits and losses from all trades, and for options, also include the premiums received from selling options. This total will give you the F&O turnover needed for tax reporting.
Refer: https://www.motilaloswal.com/learning-centre/2025/4/a-guide-for-traders-on-how-to-calculate-f-and-o-turnover

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

23 September 2025 Good luck....

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