ITR for Futures and option

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Quick Summary

If you've incurred losses in futures and options trading, you might be wondering how to declare them on your Income Tax Return (ITR). This discussion clarifies that you can use ITR-2 even with losses, and explores the option of carrying forward losses to offset future profits, which is generally advisable. It also touches upon tax audit thresholds and potential alternative filing methods.

Rakesh

Rakesh (Querist)

03 August 2020 I have total taxable income less than 2.5 lac, but in last FY i had 5-6 transactions in share futures and incurred loss of around 4.0 lac rupees. I am not interested to carry forward the loss, Can i use ITR-2 to file return without indicating the loss?
Kindly suggest
Thanks in advance

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

03 August 2020 Yes, use ITR-2 to file return without indicating the loss.

CA Raj Doshi

CA Raj Doshi (Expert)

04 August 2020 Dear Rakesh ji 1. Check if Turnover (sum of profit /loss in absolute terms)crosses tax audit limit 2. Evaluate tax impact if notional profit offered under 44AD 3. There is nothing wrong in carrying forward a loss. When you will make profits in future from any business, the same will be adjusted again carry forward losses without you having to pay tax 4. Be open to getting a tax audit done. Regards CA. Raj Doshi R C D & Co. Chartered Accountants

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Rakesh

Rakesh (Querist)

04 August 2020 Thank you Seetharaman Sir and Raj Sir for your reply

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