ITR filing for AY 2026-27: 6 points intraday and F&O traders must know

For intraday and futures and options (F&O) traders, ITR filing is no longer the same as it was a few years back. Previously, they could report trading income as business income.

But now, intraday and F&O traders need to disclose some specific details. As the ITR filing deadline approaches, this article highlights six points traders must know before filing returns.

ITR-3 is applicable for any income from intraday and F&O trading. This form applies to such traders because income from intraday trading is considered a speculative business income, while income from F&O is treated as business income.

ITR-2 applies when there are only capital gains from shares. ITR-1 is applicable when a taxpayer has only long-term capital gains (LTCG) up to ₹1.25 lakh and total income below ₹50 lakh.

Under Schedule Nature of Business or Profession in ITR-3, traders need to fill in the relevant business code.

This schedule is used to report the specific nature of the business or professional activity carried out by the taxpayer during the financial year.

According to the Income Tax Department, filing this schedule is mandatory for all individuals, HUFs, firms, companies, etc., engaged in business or profession.

The code for speculative trading, including intraday, is 21009 and the code applicable for F&O is 21010. For individuals buying or selling shares purely as a business, and not as an investment, the relevant code is 21011. You can select these codes from the dropdown while filing ITR online.

Under Schedule Part A - Trading Account of ITR-3 this year, traders are required to disclose the following:

• Turnover from Intraday Trading

• Income from Intraday Trading - transferred to Profit and Loss account

• Turnover from Futures & Options Trading

• Income from Futures & Options Trading - transferred to the Profit and Loss account

In previous years, the ITR form didn't ask traders to separately declare their F&O income.

Many traders may need to maintain a book of accounts. The ITR-3 form requires taxpayers to fill in the income and turnover details mentioned in point 3 above if they are maintaining regular books of account.

Typically, taxpayers need to maintain books of account if the turnover crosses ₹25 lakh, or the net profit exceeds ₹2.5 lakh in any of the preceding 3 years.

The book of accounts needs to be audited when a taxpayer's turnover crosses ₹10 crore and cash transactions make up less than 5% of your total business turnover.

Lastly, traders need to be careful when they are also opting for presumptive taxation.