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ITR

Expenses an F&O trader can claim

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Expenses incurred wholly for the trading business are deductible under Sec 37 (now Sec 34), such as brokerage, exchange charges, internet, advisory subscriptions and depreciation on a laptop. STT on these trades is generally deductible where the income is business income.

Provisions

Sec 37, Income-tax Act 1961 (now Sec 34, Income-tax Act 2025); Sec 36(1)(xv), Income-tax Act 1961; Sec 40A(3), Income-tax Act 1961 (now Sec 36, Income-tax Act 2025)

Analysis

Keep bills and show a reasonable link to trading. Example: F&O profit ₹3 lakh, brokerage and charges ₹45,000, data subscription ₹12,000, part of internet ₹6,000 and laptop depreciation ₹15,000 gives taxable income of about ₹2.22 lakh. Personal expenses and cash payments above ₹10,000 a day to one person are not allowed.

Close

  1. Collect broker charges statements
  2. Collect bills for subscriptions, internet and equipment
  3. Allocate shared expenses reasonably
  4. Report in the P&L of ITR-3
  5. Keep bills for future queries

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Connect nowPay and start: Business or professional income return, ITR-3 (including F&O and intraday), ₹4,999

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