F & O gain or loss

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Pratik Patel (Querist)
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13 August 2025 Dear Sir/Madam,

I have query regarding where to show F & O gain/loss in ITR?
I know it is showing under business and profession. But question is department has not provided such column to mentioned the turnover then how we will mentioned the turnover. As per my knowledge we have to mentioned under sale and purchase head according to gain/loss. if we do like this then how loss will be carried out over next 8 years?

Please guide me on this. Also, let me know if client has gain/loss from commodity then same method can do as F&O method.

Thanks and regards,

Pratik N Patel

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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13 August 2025 You're absolutely right that F&O (Futures & Options) transactions — whether in stock or commodities — are treated as business income under the Income Tax Act, and reported under "Income from Business or Profession" in the ITR.

✅ 1. Where to show F&O income/loss in ITR?
You must report it in:
ITR-3 → Part A - P&L → No Accounts Case (Schedule BP)
If you’re maintaining books, you use the "Maintain books" section.
If you're using the presumptive scheme (Section 44AD), you can use ITR-4 (in rare cases).
✅ 2. How to compute and report turnover for F&O?
F&O is considered a non-speculative business, and turnover is computed as:
For F&O:
Absolute Profit = Sum of all gains and losses (ignoring signs)
Example: Gain ₹60,000 and Loss ₹40,000 → Turnover = ₹1,00,000
This absolute turnover is required only for audit applicability, not reported separately in ITR.
🚫 Important: In ITR-3, there's no dedicated column for "turnover" of F&O. You mention it only if you're maintaining books of accounts or if your case requires audit.
So:
If no audit required (turnover below threshold, profit > 6% of turnover), you just report net profit/loss in Schedule BP.
If audit applicable, turnover is disclosed in Balance Sheet/P&L or Audit info (Schedule P&L / Part A-OI).
✅ 3. How to ensure loss is carried forward?
To carry forward F&O loss (non-speculative), ensure:
Criteria Required
File ITR On or before due date (generally 31st July for individuals)
Use proper ITR form ITR-3
Report under business income In Schedule BP
Enter in Schedule CFL Carry Forward Losses schedule — specify Business loss (non-speculative)
⛔ If filed after due date, the loss cannot be carried forward, only current year set-off is allowed.
✅ 4. Commodities F&O – Same treatment?
Yes — if traded through recognized exchanges, then commodity derivatives (MCX, NCDEX, etc.) also qualify as non-speculative business (as per Section 43(5)(e)).
So, same reporting applies:

ITR-3
Schedule BP
Carry forward in Schedule CFL
📋 Example Reporting (F&O Loss ₹80,000):
Schedule BP:
Business code: 13010 (Trading – derivatives)
Gross receipts: ₹X (optional)
Net Profit: (-) ₹80,000
Schedule CFL:
Business loss – non-speculative: ₹80,000
Assessment Year: 2025-26
To be carried forward up to: AY 2033-34

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