Salaried employee trading in derivatives like futures and options? Know your ITR deadline

If you are a salaried employee trading in derivatives, such as futures and options (F&O), it is time for you to file your Income Tax Return (ITR) for FY 2024-25 (AY 2025-26).

However, you may be confused about the ITR filing due date that will apply to you in the current ITR filing season. Here's an answer for you:

If you are a salaried employee, who is also trading in F&O, you should calculate your turnover to determine if your account needs to be audited. After this,

• If the account needs auditing, then the ITR due date for you will be October 31, 2025.

• If no auditing is required, the due date to file your ITR will be September 15, 2025.

Which ITR form is for F&O?

F&O traders need to file the ITR-3 form or ITR-4, depending on their eligibility.

While ITR-3 is for individuals and HUFs having income exceeding ₹50 lakh, ITR-4 is for income up to ₹50 lakh from presumptive business or profession.

ITR-4 applies when the taxpayer has opted for the presumptive taxation scheme and the income/turnover criteria are met.

Any gains from trading in futures and options (F&O) are taxable under the head 'Profits and Gains from Business or Profession'.

According to the Income Tax rules, income or loss from F&O is classified as a normal business income or non-speculative business income, even though no physical delivery occurs. This is important because speculative business income, like intraday equity trading, is taxed differently.

What are the tax benefits for F&O traders?

As F&O profit is treated as normal business income, it allows the following benefits:

• You can set off losses against other business income
• You can carry forward losses for up to 8 years
• You can claim business expenses like brokerage, internet advisory fees, etc.

The above benefits provide F&O traders more flexibility in their tax planning and loss adjustment.