Did F&O And Intraday Trading In FY2025-26? Here’s Why Your ITR Deadline Is Beyond July 31

With the July 31 deadline approaching, most individuals are busy filing the Income Tax Return (ITR) for AY 2026-27. However, if you have bought or sold a stock on the same day even once, or executed even a single futures and options (F&O) trade last year, you don't have to worry much. The last date for filing ITR for F&O and intraday traders is August 31, 2026, provided a tax audit is not applicable.

Important Deadlines For F&O And Intraday Traders

Under the Income Tax laws, both F&O and intraday trading are treated as business income, which means the taxpayer must file ITR-3. However, if the taxpayer opts for the presumptive taxation scheme, then they must file ITR-4. The taxpayer can file the applicable ITR before August 31, 2026, if a tax audit is not applicable for FY 2025-26. On the other hand, if the tax audit is not applicable, then they have the deadline till October 31, 2026. Notably, a tax audit under Section 44AB of the Income Tax Act is required if the taxpayer's turnover exceeds a specified limit.

Why Are F&O And Intraday Trading Treated Differently?

According to the Income Tax Act, different types of market transactions are treated differently. Income from intraday equity trading is treated as speculative business income under Section 43(5). Meanwhile, income from F&O trading is regarded as non-speculative business under the same provision and is taxable under the head 'Profits and Gains from Business or Profession'.

Since F&O trading is considered a non-speculative business, traders are allowed to set off the speculative losses against other business income, such as profits from freelancing, consultancy or a shop. F&O traders have two primary set-off options. First is intra-head set-off, where F&O losses can be adjusted against non-speculative business income. The second is inter-head set-off, where F&O losses can be adjusted against income from other heads such as capital gains. Also, F&O losses can be carried forward and set off against any business income in the future, provided the ITR is filed before the deadline and does not require a tax audit.

How Are F&O And Intraday Trading Taxed?

Notably, income from F&O And Intraday trading is taxed at applicable income tax slab rates. While filing the ITR, the trading income is added to the taxpayer's total taxable income and taxed under the chosen tax regime. If the taxpayer has not chosen any regime, then the trading income will be taxed under the new regime by default. Also, eligible taxpayers can claim the rebate under Section 87A, subject to the conditions specified in the Income Tax Act.

While computing taxable income, the taxpayer can deduct business expenses that are incurred wholly and exclusively for the trading activity, such as brokerage, Securities Transaction Tax (STT), GST on brokerage, exchange transaction charges, SEBI turnover fees, internet and phone expenses used for trading, trading software and market data subscriptions, professional or advisory fees, and depreciation on eligible business assets such as computers. However, expenses that are not allowable under the Income Tax Act, including cash payments exceeding the prescribed limit, cannot be claimed as deductions.