Answer

1. F

   Facts

   F&O profit is business income taxed at slab rates, so the Sec 87A (now Sec 156) rebate under the new regime applies. For AY 2026-27 the rebate is up to ₹60,000 where total income does not exceed ₹12 lakh.

2. P

   Provisions and law

   • Sec 87A, Income-tax Act 1961 (now Sec 156, Income-tax Act 2025)Rebate up to ₹60,000 under the new regime where total income is up to ₹12 lakh (AY 2026-27)
   • Sec 115BAC, Income-tax Act 1961 (now Sec 202, Income-tax Act 2025)New tax regime is the default; business filers opt out by Form 10-IEA by the due date
   • Sec 28, Income-tax Act 1961 (now Sec 26, Income-tax Act 2025)Profits and gains of business or profession are taxable
3. A

   Analysis

   Example: F&O profit ₹8 lakh and no other income. New regime tax is ₹20,000 before rebate (5% on ₹4 lakh to ₹8 lakh), fully covered by the rebate, so tax is nil plus no cess. The return is still mandatory to report the business income. Special rate income such as short-term gains on listed shares does not get the same rebate treatment, so check the computation if you have both.

4. C

   Conclusion

   1. 1Compute total income including F&O profit
   2. 2Check if it is within ₹12 lakh under the new regime
   3. 3Apply the rebate in the computation
   4. 4File ITR-3 even if tax is nil

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.