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F&O reporting in ITR

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This query is : Resolved

Suresh S. Tejwani (Querist)

28 July 2026 I am an individual trader having only F&O trading income. My F&O contract/sale value is ₹64 lakh and I have incurred a net F&O loss of ₹1.17 lakh, which I want to carry forward. Will tax audit become applicable merely because I have incurred a loss? If tax audit is not applicable, while filing ITR-3 should I report my turnover as the ₹64 lakh contract/sale value or as the F&O turnover computed as per the ICAI Guidance Note (absolute profit/loss method)? Also, how should I correctly report the turnover and business loss in ITR-3, and which schedules should be filled to ensure the loss is validly carried forward to subsequent years?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

28 July 2026 Tax Audit: Not applicable since turnover is below the statutory audit threshold.

Turnover Calculation: Must be calculated as per the ICAI Guidance Note (sum of absolute positive and negative differences), not the total contract value of ₹64 Lakhs.

Carry Forward: File ITR-3 on or before the due date and report the loss in Schedule CFL to ensure it is validly carried forward.

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