Derivatives taxation and set offs

options income is to be taxed under the head of "Income from business or profession".

1)  long term loss on equities are capital loss and no tax treatment. it cannot be set off against any other income.

2) how is it possible to set off income against income??

Firstlly STCG from F&O (instruments without delevry) shall be cosiderd as SPECULATION INCOME

whech can not be sett off againset any other income except Speculation Income

Further LTCL from equity is can not be sett off againsst any other income (as LTCG OF EQ IS EXEMPT)

So,

STCLs from equity can be sett off only gaised STCG for equity (spceal rate for that income 111A)

Thuse the answere to both the answere are Negative

Parth, F&O are different business and cannot be considered as speculation at all.

Harshit, why would you want to set-off STCL against LTCG? LTCG is an exempt income rather c/f STCL to be set-off against future STCG.

Parth, its good that you are working, but it is not right to go as per assumptions and logics as you might land up in trouble in your exams which are very critical. Be thourough with the words as reading and understanding each and every word in any law is the key to find loop holes and better interpretation. best of luck..

For a share trader loss/profit from equities is also business loss/profit and hence option loss/profit can be set-off against each other... otherwise i agree wth Ankit... if the issue pertains to companies then Explanation to Section 73 as well as Section 43(5)(d) has to be considered in view of many recent decisions... If that is your case then do give the details and i will post the relevant decisions.