If you traded futures or options during the year, even once and even at a loss, the simpler return forms no longer fit. F&O is business income, and business income has to be reported in a form built for it.
General information, not tax advice
This article explains the rules in general terms for education. It is not tax advice and may not fit your situation. Tax law and due dates change, and the Income-tax Act, 2025 is new, so some points are still being interpreted. Consult a chartered accountant before you file or make a decision.
Which form
- ITR-3 is the form for individuals and HUFs with income from a business or profession that is computed from accounts. This is the usual form for F&O traders, including salaried people who also trade.
- ITR-4 is used by those who opt for presumptive taxation. It is possible for F&O in some cases, but the scheme rarely suits traders (see the overview article).
- ITR-1 and ITR-2 have no place for business income, so they cannot be used once you have F&O transactions.
The ITR forms for FY 2025-26 (AY 2026-27) were notified in March 2026 and ITR-3 kept its name. Forms for tax year 2026-27, the first year under the Income-tax Act, 2025, are filed in 2027; check the form list on the e-filing portal when the season opens.
What goes into ITR-3
- A profit and loss account for the trading business: gross profit or loss from F&O, the expenses you claim, and the net result.
- A balance sheet: what the business owns and owes at year end, such as the trading balance with your broker, bank balance used for trading, and any equipment.
- Turnover, calculated by the ICAI method, and gross profit or loss for each type of trading.
- Your other income under its own heads: salary, house property, capital gains from investments, and other sources.
- Audit details if an audit applies, and losses brought forward from earlier years.
Books of account become compulsory for individuals above limits set in the law. Under the 1961 Act these were, broadly, income above ₹2.5 lakh or turnover above ₹25 lakh, and the 2025 Act has a corresponding provision. Many traders keep simple books regardless, built from the broker's tax P&L, ledger, contract notes and bank statements, because the return asks for the same figures.
Documents to gather
- Tax P&L and ledger from each broker, with trade-wise turnover.
- Annual Information Statement and Form 26AS (renamed Form 168 under the new rules) to match TDS and reported transactions.
- Invoices for expenses you claim, and bank statements.
- Details of losses carried forward from previous returns.
Due dates
The Finance Act, 2026 moved the due date for non-audit business returns (ITR-3 and ITR-4) from 31 July to 31 August, starting with AY 2026-27. Salaried filers using ITR-1 or ITR-2 stay on 31 July.
| Case | FY 2025-26 (AY 2026-27) | Tax year 2026-27 |
|---|---|---|
| Return, no audit (ITR-3) | 31 August 2026 | 31 August 2027 |
| Audit report | 21 October 2026 (extended) | 30 September 2027 |
| Return, audit case | 21 November 2026 (extended) | 31 October 2027 |
Why the due date matters for traders
A loss from F&O can be carried forward to later years only if the return is filed by the due date. A late return can still be filed with a fee, but the carry-forward of that year's business loss is lost.
Examples use illustrative values, not current market data. This is general education, not investment advice.