Many salaried taxpayers assume that the last date for filing their Income Tax Return (ITR) is 31 July. However, even a single intraday or Futures & Options (F&O) trade during the previous financial year can change this deadline.
Under the Income Tax rules, profits or losses from intraday and F&O trading are treated as business income. Therefore, it is important to understand the correct ITR form, turnover calculation, and applicable filing deadline. Incorrect reporting can increase the risk of delays in return processing or even lead to tax notices.
Why Does the ITR Deadline Change with Even One Trade?
In intraday trading, shares are bought and sold on the same day. The resulting profit or loss is treated as speculative business income and is taxed according to the applicable income tax slab. A speculative loss from intraday trading can only be set off against speculative profits.
On the other hand, income or loss from F&O trading is treated as non-speculative business income. Even though there is no actual delivery of shares in derivative transactions, the income is reported under ‘Profits and Gains from Business or Profession’.
As a result, even if a salaried individual executes just one intraday or F&O trade, they are considered to have business income under the Income Tax rules. This is why their ITR filing deadline may differ from that of taxpayers who earn only salary and regular investment income.
What Will Be Your Correct ITR Deadline?
According to the Finance Act, 2026, the ITR filing deadline for taxpayers with business or professional income who are not required to undergo a tax audit has been extended from 31 July to 31 August 2026.
Therefore, if a salaried individual has undertaken intraday or F&O trading and a tax audit is not applicable, the ITR filing deadline for Assessment Year 2026-27 will be 31 August 2026.
If a tax audit is required based on turnover and other prescribed conditions, the return filing deadline will be 31 October 2026. For example, if a sole proprietor has a turnover of Rs 80 lakh and a tax audit is not applicable, the ITR filing deadline will still be 31 August 2026.
How Is F&O Turnover Calculated?
Accurate calculation of F&O turnover is essential to determine whether a tax audit is required. As per ICAI guidance, turnover is calculated by adding the absolute value of all favourable and unfavourable differences.
Premium received from selling options is also included in turnover. However, if the premium has already been accounted for in the net profit or loss, it should not be added again.
The difference arising from reverse trades is also included in turnover. Open positions at the end of the financial year are considered for turnover in the year in which they are squared off or settled.
Correct ITR Form and Reporting
Taxpayers with intraday or F&O income generally need to file ITR-3. ITR-2 is primarily meant for individuals earning investment income such as capital gains, while ITR-1 is applicable only to taxpayers meeting specified conditions.
In ITR-3 for Assessment Year 2026-27, taxpayers must select the correct business activity code. The code for intraday (speculative) trading is 21009, for F&O trading it is 21010, and for share trading treated as a business it is 21011.
In the trading account section, intraday and F&O turnover must be reported separately. The income or loss from each activity should also be disclosed separately.
Loss, Records, and Tax Audit
Traders should retain broker statements, contract notes, bank records, and profit-and-loss statements for proper documentation. If, in any of the previous three financial years, business turnover exceeded Rs 25 lakh or net profit exceeded Rs 2.5 lakh, maintaining books of account may become mandatory.
If there is a loss from F&O trading and the total income is below the basic exemption limit, filing an ITR may not be mandatory in every case. However, to carry forward that loss to future years, the return must be filed within the prescribed due date. Therefore, even if you incur a loss, filing your ITR on time can help you claim tax benefits in future years.
Conclusion
Even a single intraday or F&O trade can change your ITR category, the form you need to file, and your filing deadline. Therefore, assuming that 31 July is the default deadline may not always be correct.
Before filing your return, you should determine the nature of your trading income, calculate your turnover correctly, assess whether a tax audit is applicable, and choose the appropriate ITR form. If a tax audit is not required, your deadline may be 31 August 2026. If a tax audit is applicable, the deadline may be 31 October 2026.
Disclaimer: This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The companies mentioned are cited as examples within the context of market developments. Investors are advised to conduct their own due diligence and consult their financial advisor before making any investment decisions.
Investments in the securities market are subject to market risks. Read all related documents carefully before investing.
