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.
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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