Answer

1. F

   Facts

   Since F&O is business income, expenses incurred wholly for trading can be deducted, such as brokerage, exchange charges, internet, advisory or software subscriptions and depreciation on a computer. STT paid on these trades is also allowed as a deduction against business income.

2. P

   Provisions and law

   • Sec 37 (now Sec 34)General deduction for business expenses
   • Sec 36(1)(xv), Income-tax Act 1961Deduction for securities transaction tax paid on business trades
3. A

   Analysis

   If gross F&O profit is ₹5,00,000, brokerage and charges ₹40,000, internet share ₹12,000, advisory ₹30,000 and depreciation on a laptop ₹20,000, net income is ₹3,98,000. Keep bills and show only the business share of mixed use items. Personal expenses are not allowed.

4. C

   Conclusion

   1. 1Collect bills for trading related expenses
   2. 2Apportion mixed use items reasonably
   3. 3Claim depreciation on trading equipment
   4. 4Report net income in ITR-3

The 2025 Act number for Sec 36(1)(xv) is not confirmed in our mapping; cite the 1961 section for past years.

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