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Non-speculation

CA Aspirant (CA) (1459 Points)

04 August 2020

Can we setoff losses in case of futures and option?? If yes then under which head??

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 04 August 2020

If you are dealing in F&O as trader and offered profit/ loss under business head (non speculative) than F&O losses can be set off against other incomes (except salary) in the financial year in which the loss was incurred. However, if this loss is carried forward to future years, it can only be set-off against business income of that year.

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CA Aspirant (CA) (1459 Points)
Replied 05 August 2020

Having short term capital gain

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 05 August 2020

Loss from F&O trading is treated as non-speculative business loss subject to fulfillment of conditions laid down in Section 43(5) of the IT Act.
Non-speculative business loss can be set off against any income other than salaries. So it can be set off against bank interest income, rental income, capital gains, all income except salary income.
So, if you have a short term capital gain than you can adjust that STCG with F&O business loss.

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