Answer

ITR

Speculative loss from intraday trading

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  1. Facts

    No. A speculative loss can be set off only against speculative income and carried forward for 4 years under Sec 73 (now Sec 113). An F&O loss, being non-speculative, can be set off against speculative profit.

  2. Provisions and law

    • Sec 73, Income-tax Act 1961 (now Sec 113, Income-tax Act 2025)Speculation loss is set off only against speculation income and carried forward for 4 years
    • Sec 43(5), Income-tax Act 1961Defines speculative transactions; derivatives on recognised exchanges are not speculative (2025 Act number to be confirmed)

  3. Analysis

    Example: intraday loss ₹80,000 and F&O profit ₹1 lakh. The intraday loss stays separate and is carried forward; tax is paid on ₹1 lakh F&O profit. In the reverse case, F&O loss ₹80,000 and intraday profit ₹1 lakh, the F&O loss can be set off, leaving ₹20,000 taxable. File on time to keep the speculative loss.

  4. Conclusion

    1. Separate speculative and non-speculative results
    2. Apply the set off rules for each
    3. Carry forward speculative loss for up to 4 years
    4. File by the due date

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