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Non-speculation

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CA Aspirant

1469 Points Posted on 04 August 2020

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

Replies (5)

Quick Summary

Futures and Options (F&O) losses can be set off against other income sources, provided they are treated as non-speculative business losses under Section 43(5) of the IT Act. This means F&O losses can be offset against bank interest, rental income, and capital gains, but not salary income in the year the loss is incurred. If carried forward, these losses can only be offset against future business income.

Sagar Patel

Tax and Business Consultant

11616 Points Posted on 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.

CA Aspirant

1469 Points Posted on 05 August 2020

Having short term capital gain

Sagar Patel

Tax and Business Consultant

11616 Points Posted on 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.