FnOTax India
AY 2026-27 Scenario guide ITR-3

NIFTY options tax filing.

NIFTY options are the default index-option product for many traders. The tax treatment is not capital gains: it is F&O business income reported in ITR-3.

Check audit All scenarios

Who this is for

Profile

You traded NIFTY options during the FY.

Filing position

ITR-3

Use ITR-3 and aggregate NIFTY with all F&O business activity.

Step-by-step workflow

Do this
  1. Download broker Tax P&L and tradebook.
  2. Extract NIFTY option realised P&L and charges.
  3. Verify premium treatment in turnover.
  4. Aggregate with other F&O segments.
  5. Report net business income/loss and preserve records.

Common mistakes

Avoid

Calling it capital gains

Exchange-traded F&O is generally business income.

Using premium paid as loss directly

Use realised P&L after closing/expiry and charges.

Not checking audit

Even profitable small traders should verify turnover and audit thresholds.

Useful tools

Next action

Turnover calculator

Open this FnOTax guide or calculator for the next step.

Audit checker

Open this FnOTax guide or calculator for the next step.

Loss set-off checker

Open this FnOTax guide or calculator for the next step.

ITR-3 vs ITR-4 checker

Open this FnOTax guide or calculator for the next step.

Frequently asked questions

Is NIFTY option income business income?
Yes, generally non-speculative business income.
Which ITR for NIFTY options?
ITR-3 is the default.
Do NIFTY option charges reduce income?
Eligible trading charges reduce business profit, not turnover.