Whether Doing a trading in DERIVATIVES, or profit or loss in DERIVATIVES ( F & O) is termed as SPECULATIVE BUSINESS and profit and loss , from it is termed as either INCOME from SPECULATIVE BUSINESS or BUSINESS INCOME, LOSSES as SPECULATIVE LOSSES or BUISNESS LOSS. Next can this LOSS in DERIVATIVES SEGMENT can be adjusted in BUISNESS INCOME, and INCOME from OTHER SOURCES, can LOSS in DERIVATIVES SEGMENT can be carried forward for 8 years.
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Trading in equity /comm.derivatives (f&o)
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Section 43(5)"Speculative Transaction" Means A Transaction In Which A Contract For The Purchase Or Sale Of Any Commodity, Including Stocks And Shares, Is Periodically Or Ultimately Settled Otherwise Than By The Actual Delivery Or Transfer Of The Commodity Or Scrips:
Provided That For The Purposes Of This Clause—
(A) A Contract In Respect Of Raw Materials Or Merchandise Entered Into By A Person In The Course Of His Manufacturing Or Merchanting Business To Guard Against Loss Through Future Price Fluctuations In Respect Of His Contracts For Actual Delivery Of Goods Manufactured By Him Or Merchandise Sold By Him; Or
(B) A Contract In Respect Of Stocks And Shares Entered Into By A Dealer Or Investor Therein To Guard Against Loss In His Holdings Of Stocks And Shares Through Price Fluctuations; Or
(C) A Contract Entered Into By A Member Of A Forward Market Or A Stock Exchange In The Course Of Any Transaction In The Nature Of Jobbing Or Arbitrage To Guard Against Loss Which May Arise In The Ordinary Course Of His Business As Such Member; Or
(D) An Eligible Transaction In Respect Of Trading In Derivatives Referred To In Clause (Ac) Of Section 2 Of The Securities Contracts (Regulation) Act, 1956 (42 Of 1956) Carried Out In A Recognized Stock Exchange; Or
(E) An Eligible Transaction In Respect Of Trading In Commodity Derivatives Carried Out In A Recognized Association 6a[, Which Is Chargeable To Commodities Transaction Tax Under Chapter Vii Of The Finance Act, 2013 (17 Of 2013),]
Shall Not Be Deemed To Be A Speculative Transaction.
Income From Trading Futures & Options On Recognized Exchanges Is Categorized Under Non-Speculative Business Income. Tax On Share Trading In Such Cases Is Similar To Your Business Income Tax.
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