F&O trading tax refers to the tax regulations applied to income generated from trading in futures and options in the financial markets, here are some things to know.
1
Income from F&O trading is classified as "business income" under the Income Tax Act of India.
2
For individuals, this follows the progressive tax slabs ranging from 0% to 30%, based on the total income.
3
The turnover from F&O trading exceeds ₹1 crore, or if the income is less than 6% of the turnover and the total income exceeds the basic exemption limit.
4
This includes the sum of the positive and negative differences from the trades during the financial year.
5
Expenses directly related to the F&O trading business, such as brokerage fees, internet charges, and other operational costs.
6
F&O traders must pay advance tax if their total tax liability exceeds ₹10,000 in a financial year.
7
Income from F&O trading must be reported in the Income Tax Return (ITR) under the head "Income from Business or Profession."