Can You Carry Forward F&O Losses if You File ITR-3 by 15th September? (FY 24-25 / AY 25-26)

By FnOTax India Editorial Board · Updated 2026-05-29 · F&O Loss

Source basis: This research draft is checked against listed official sources where available. It is educational guidance, not personalized tax advice.

Can You Carry Forward F&O Losses if You File ITR-3 by 15th September? (FY 24-25 / AY 25-26)

You are reading this because you have F&O or intraday trading losses for FY 2024-25 (AY 2025-26), and you are staring at the calendar. You missed the 31st July deadline, or you are confused by conflicting advice online about a “15th September extended due date.”

Your exact question is: “Ised ITR-3 me 15 Sep (extended due date) pehle losses carryforward kr sakte hain ya nhi FY 24-25 and AY 25-26 ke liye?”

Let us cut through the noise. Most articles on the web will confuse you by quoting outdated F&O turnover calculation methods (like adding option premiums) or citing draft provisions of the proposed “Income Tax Act 2025” which do not apply to AY 2025-26.

Here is the definitive, legally accurate answer.

The Direct Answer: It Depends on Your Tax Audit Status

Whether you can carry forward your F&O losses by filing ITR-3 on 15th September depends entirely on one factor: Are you subject to a Tax Audit under Section 44AB?

  1. If you DO NOT require a Tax Audit (Non-Audit Case): Your original ITR-3 due date for AY 2025-26 was 31st July 2025. If you file on 15th September, you are filing a belated return under Section 139(4). No, you cannot carry forward your F&O losses. They will lapse.

  2. If you DO require a Tax Audit (Audit Case): Your ITR-3 due date for AY 2025-26 is 31st October 2025 (with the Tax Audit Report due by 30th September). If you file on 15th September, you are filing before your due date. Yes, you can successfully carry forward your F&O losses.

Busting the “15th September” Myth

Where does the 15th September date come from? Why is there so much deadline anxiety in the trading community around this specific date?

15th September is NOT an extended ITR filing deadline. It is the deadline for the second installment of Advance Tax.

Many traders confuse the Advance Tax deadline with an ITR extension. Others confuse it with the 30th September deadline, which is the last date for Chartered Accountants to upload the Tax Audit Report (Form 3CA/3CB-3CD) for audit-applicable taxpayers.

For ITR-3 filing, there are only two standard deadlines for individuals in AY 2025-26:

  • 31st July: For accounts not requiring an audit.
  • 31st October: For accounts requiring an audit.

(Note: Looking ahead to AY 2026-27, the Finance Act 2026 has extended the standard non-audit ITR-3 due date to 31st August 2026. However, for your current FY 24-25 / AY 25-26 filing, the 31st July deadline applies).

Section 80 & 139(1): The Golden Rule of Loss Carry-Forward

Why are deadlines so critical for traders? Because of Section 80 read with Section 139(1) of the Income Tax Act, 1961.

Section 80 strictly mandates that a loss cannot be carried forward unless the return of income is filed on or before the due date specified under Section 139(1).

If you file even one day late, you lose the right to carry forward:

  • Non-speculative business losses (F&O trading)
  • Speculative business losses (Intraday equity trading)
  • Capital losses (Short-term and Long-term)

How F&O Losses Work (Section 43(5) and Section 72)

Under Section 43(5) proviso (d), trading in derivatives (F&O) on a recognized stock exchange is classified as non-speculative business income.

If you file your ITR-3 on time, Section 72 allows you to carry forward these F&O losses for 8 consecutive assessment years. In future years, these carried-forward losses can be set off against any business income (both speculative and non-speculative).

Setting Off Losses in the Same Year (Section 71)

Even if you file a belated return (e.g., filing on 15th September as a non-audit case), you do not lose everything. Section 71 allows you to set off your F&O losses against other income in the same financial year.

You can set off F&O losses against:

  • Interest income (FDs, savings)
  • Rental income (House Property)
  • Capital Gains (STCG/LTCG)
  • Other business income

Crucial Exception: You cannot set off business losses (including F&O) against Salary income.

Do You Need a Tax Audit? (The Rs 10 Crore Rule)

Since your ability to carry forward losses on 15th September hinges entirely on whether you need a tax audit, you must calculate your turnover correctly.

Many traders receive notices for defective returns under Section 139(9) because they miscalculate their turnover or misunderstand the audit thresholds.

1. Calculating F&O Turnover (The 2026-Correct Method)

Forget the old rules. Do not add option premiums separately.

As per the authoritative ICAI 8th Edition Guidance Note on Tax Audit u/s 44AB (issued 19 August 2022), F&O turnover is calculated simply as: Turnover = Sum of Absolute Profits + Sum of Absolute Losses

Example:

  • Trade 1: Profit of Rs 50,000
  • Trade 2: Loss of Rs 30,000
  • Trade 3: Profit of Rs 10,000
  • Total F&O Turnover = 50,000 + 30,000 + 10,000 = Rs 90,000.

2. The Rs 10 Crore Threshold (Section 44AB(a))

Under Section 44AB(a), a tax audit is mandatory if your business turnover exceeds Rs 1 crore.

However, this threshold is raised to Rs 10 crore IF your cash receipts AND cash payments each do not exceed 5% of total receipts/payments. Because F&O trading is 100% digital (routed through bank accounts and brokers), the Rs 10 crore threshold effectively applies to all F&O traders.

If your absolute turnover is below Rs 10 crore, you generally do not need a tax audit. Your due date was 31st July.

3. The Section 44AB(e) / 44AD(4) Trap

There is one major exception where you might need an audit even if your turnover is below Rs 10 crore.

Under Section 44AD, the presumptive taxation turnover limit was raised to Rs 3 crore (effective FY 2023-24). If you opted for 44AD presumptive taxation (declaring 6% profit on digital turnover) in any of the last 5 years, and this year you decide to opt out because you incurred an F&O loss or your profit is less than 6%, you trigger Section 44AD(4).

If this happens, and your total income exceeds the basic exemption limit (Rs 3 lakh under the new regime), a tax audit becomes mandatory under Section 44AB(e). Furthermore, you are barred from re-entering the 44AD scheme for the next 5 years.

If you fall into this trap, congratulations—your due date is 31st October, and filing on 15th September will save your losses.

Worked Example: The Tale of Two Traders

Let us look at real numbers to see how the 15th September filing impacts two different traders for FY 2024-25.

Trader A: Rahul (Non-Audit)

  • F&O Turnover (Absolute): Rs 4 Crore
  • F&O Net Result: Loss of Rs 8 Lakhs
  • Salary Income: Rs 15 Lakhs
  • Audit Status: Turnover is under Rs 10 Crore, 100% digital. No previous 44AD history. No Tax Audit required.
  • Due Date: 31st July 2025.
  • Action: Rahul files ITR-3 on 15th September 2025.
  • Result: Rahul’s return is belated. He can set off his Rs 8 Lakh loss against other eligible income in FY 24-25 (but not against his Rs 15 Lakh salary). The remaining unadjusted loss cannot be carried forward to AY 2026-27. It is a dead loss.

Trader B: Priya (Audit Applicable)

  • F&O Turnover (Absolute): Rs 12 Crore
  • F&O Net Result: Loss of Rs 25 Lakhs
  • Salary Income: Rs 0
  • Audit Status: Turnover exceeds Rs 10 Crore. Tax Audit is mandatory.
  • Due Date: 31st October 2025 (Audit report due 30th Sept).
  • Action: Priya’s CA uploads Form 3CB-3CD on 10th September, and she files ITR-3 on 15th September 2025.
  • Result: Priya filed well before her 31st October deadline. Under Section 80, her entire Rs 25 Lakh F&O loss is preserved and carried forward for the next 8 assessment years.

What Happens If You Miss a Mandatory Tax Audit?

If your turnover exceeded Rs 10 crore (or you triggered the 44AD trap) and you simply filed ITR-3 without getting your books audited by a CA, you will face consequences under Section 271B.

The penalty (recently reclassified as a ‘fee’ by the Finance Act 2026 to reduce litigation, though the amount remains unchanged) for failing to get accounts audited is: 0.5% of total sales/turnover OR Rs 1,50,000 — whichever is LOWER.

Additionally, under Section 44AA, F&O traders must maintain proper books of account if their business income exceeds Rs 1.2 lakh OR turnover exceeds Rs 10 lakh in any of the last 3 years. When filing ITR-3, you can claim indirect expenses against your F&O business. As confirmed by community tax experts, charges like DP charges, pledge charges for collateral, internet bills, and trading terminal subscriptions can be claimed as indirect expenses to reduce your taxable business income.

Frequently Asked Questions (FAQs)

1. Can I carry forward F&O losses if I file ITR-3 on 15th September for FY 2024-25? It depends on your tax audit status. If your turnover requires a tax audit, your due date is 31st October, so filing on 15th September is on time, and you can carry forward losses. If you do not require a tax audit, your due date was 31st July. Filing on 15th September makes it a belated return, and under Section 80, you cannot carry forward the losses.

2. Is 15th September an extended due date for ITR-3? No. 15th September is the deadline for the second installment of Advance Tax. It is not an ITR filing deadline. The ITR-3 deadlines for AY 2025-26 are 31st July (Non-Audit) and 31st October (Tax Audit).

3. How is F&O turnover calculated for tax audit applicability? As per the ICAI 8th Edition Guidance Note (August 2022), F&O turnover is the sum of absolute profits and absolute losses for each trade. Premium received on options writing is NOT added separately.

4. Can I set off F&O losses against my salary income? No. Under Section 71 of the Income Tax Act, business losses (including F&O) cannot be set off against salary income. They can be set off against other business income, rental income, capital gains, or interest income in the same financial year.

5. What happens if I made just one intraday trade by mistake and incurred a loss? Intraday equity trading is considered speculative business income under Section 43(5). Even for a single trade, you should ideally file ITR-3 to report the business loss accurately, though a tax audit is only required if you breach turnover thresholds or Section 44AD(4) conditions.

Tax Advice Caveat: Tax laws are subject to frequent amendments. The information provided regarding FY 2024-25 (AY 2025-26) and the upcoming AY 2026-27 changes is based on the Income Tax Act, 1961, as amended up to the Finance Act 2026. Always consult a registered Chartered Accountant to evaluate your specific turnover, audit applicability, and ITR-3 filing requirements.

Official sources

Source basis: The references below point to the official Indian tax sources used to inform this article. The article has not completed our full source-verification review; treat it as educational guidance only and consult a qualified Chartered Accountant before acting on it.