FnOTax India
AY 2026-27 Scenario guide ITR-3

F&O profit with salary income.

Salary income does not make F&O casual or capital-gains income. Once you trade derivatives, the F&O result is business income and needs ITR-3 treatment alongside salary.

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Who this is for

Profile

You have Form 16 salary income and net profitable F&O trades during the financial year.

Filing position

ITR-3

Use ITR-3. Salary remains salary income; F&O profit goes to business income. Broker charges and direct trading expenses reduce business profit, not turnover.

Step-by-step workflow

Do this
  1. Download Tax P&L and ledger from each broker.
  2. Separate F&O business profit from delivery capital gains.
  3. List brokerage, STT/CTT, exchange, SEBI, stamp, GST, and direct trading costs.
  4. Compute turnover for audit applicability.
  5. Combine salary and F&O profit for final tax and advance-tax interest review.

Common mistakes

Avoid

Filing ITR-2 because salary is the main income

F&O business income requires ITR-3.

Ignoring advance tax

Broker TDS usually does not cover F&O profit, so self-payment may be needed.

Missing expenses

Broker charges and direct trading costs can materially reduce taxable business profit.

Useful tools

Next action

Turnover calculator

Open this FnOTax guide or calculator for the next step.

Audit checker

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Loss set-off checker

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ITR-3 vs ITR-4 checker

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Frequently asked questions

Is F&O profit taxed at slab rate?
Yes. Non-speculative business income is taxed at applicable slab rates.
Does salary TDS cover F&O tax?
Not necessarily. Salary TDS may not cover business-income tax.
Can I deduct STT and brokerage?
Yes, for F&O business income, eligible trade-related charges are deductible.