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Taxability of futures and options - which itr to fill

Rashmi (others) (28 Points)

28 July 2011

In case one trades in Futures and Options, and has capital gains/ losses then

1. Which ITR form needs to be filled?

2. In case one suffers losses in futures and options trading, can that be carried forward and if so, where in the ITR form should that be accounted

Thanks

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CA Nitu Agarwal (CA, M.Com) (266 Points)
Replied 28 July 2011

ITR 4 is required to be filed. Loss from F&O is considered as business loss and can be carried forward upto 8 years. Same should be shown in "losses to be carried forward column" in CFL sheet. Remenber to click "Calculate set off" option in "Set off" Sheet.

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pahuja (C.A Final Student ) (472 Points)
Replied 28 July 2011

Hi Rashmi, as per sec 43(5), sale/purchase of future and option considered as speculative transaction, which attracts i.t.r 4, and as per sec 73 losses of speculative business could be carried forward upto 4 year only. Thanks and regards suraj pahuja.

Sunshine (Helping All) (10575 Points)
Replied 28 July 2011

Its a speculative business...ITR 4 needs to be filed and the losses can be carried forward fr 4 A.Y only..

CA Nitu Agarwal (CA, M.Com) (266 Points)
Replied 28 July 2011

Notification no.46/2009, dated 22-05-2009

As per Sec. 43(5), an eligible transaction in respect of trading in derivatives referred to in Sec 2 of SCRA, 1956, carried out in a recognised stock excange shall not be deemed to be a speculative transaction.

CG has notified MCX as a recognised stock exchange for the purposes of section 43(5). So F&O TRANSACTIONS ARE TREATED AS NORMAL BUSINESS INCOME. However INTRA DAY TRADING is treated as SPECULATIVE BUSINESS. So loss can be carried forward for 8 years.

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