Loss in F&O(derivatives) is a non speculative business loss.Non speculative business loss can be set off against all profits except salary income .Therefore, in my opinion, it can be set off.
As per the new provisions of the Income Tax India.. Setoff of losses with regard to business income which are brought forward nature can be setoff against business income only.... and not with any other income
F & O transactions can be treated as capital gains or business income according to the volume, etc. If treated as business income, it is not speculative income. That is what the explanation in s43(5) means
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