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Set Off FnO Loss against Int on FD

Ravishankar K (Accountant) (458 Points)

13 March 2021  

Hi Guys, 

I got into trading in this year and have got huge loss. I am a salaried employee and also have earnings on FD Interest on which I pay tax. Can i set off the Loss which I had in trading (FnO -  Non Speculative)  against the Interest earned in FD. 

Amounts are quite big and it will help to reduce tax if I am able to set off the loss. Also i guess will need to file ITR 3 for this year. 


 7 Replies

Sourav (Student) (23912 Points)
Replied 13 March 2021

No you cannot set off F&O trading against Interest earned on FD. File ITR 3

Kapadia Pravin (17209 Points)
Replied 14 March 2021

File ITR3. Loss I think you won't be able to set off.

Sourav (Student) (23912 Points)
Replied 14 March 2021

It's impossible

anil jain (Partner) (964 Points)
Replied 14 March 2021

Please show your loss under the head PGBP Profit ang Gains of Business and Profession and not under the head Capital Gain. You may get set off.

FnO transactions are not covered under speculartive transactions.

 

Sub section (1) and (2) of section 71 are as below

Set off of loss from one head against income from another.

71. (1) Where in respect of any assessment year the net result of the computation under any head of income, other than "Capital gains", is a loss and the assessee has no income under the head "Capital gains", he shall, subject to the provisions of this Chapter, be entitled to have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head.

(2) Where in respect of any assessment year, the net result of the computation under any head of income, other than "Capital gains", is a loss and the assessee has income assessable under the head "Capital gains", such loss may, subject to the provisions of this Chapter, be set off against his income, if any, assessable for that assessment year under any head of income including the head "Capital gains" (whether relating to short-term capital assets or any other capital assets).

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1 Like

Ravishankar K (Accountant) (458 Points)
Replied 14 March 2021

Thanks so for this year should i file ITR3, last year i had only salary income so filed ITR1 

Kapadia Pravin (17209 Points)
Replied 15 March 2021

That's right. File ITR3 this year. Last year it's okay. For claiming loss carry forward, you need to file before due date. Now it's late.

SUSHANT BIDAYE (503 Points)
Replied 15 March 2021

I agree with mr. Jain. f &O is business loss and can be set off against interest income.

since you mentioned huge f& o loss, check the tax audit applicability.

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