How are F&O profits and losses taxed in India?

F&O trading profits and losses are classified as non-speculative business income under Indian tax law (unlike intraday equity, which is speculative), and they’re taxed at your applicable income tax slab rate, added to your total income for the year rather than taxed under capital gains rules. A key practical benefit of the non-speculative classification is that F&O losses can be set off against most other forms of income (except salary income) in the same year, and carried forward for up to eight years if not fully utilised, which gives more flexibility than the speculative-loss rules that apply to intraday equity. F&O trading, depending on turnover, may also trigger tax audit requirements under Section 44AB of the Income Tax Act, and turnover for F&O is calculated in a specific way (based on absolute profit and loss figures across trades, not just the total value traded) that differs from how turnover is understood in a typical business context. Given how turnover calculation and audit applicability work in F&O specifically, you treat this as an area where getting professional guidance from a chartered accountant is genuinely worth it, rather than trying to self-file based on general online explanations.