ITR filing AY 2026-27: 5 key tax rules that intraday and F&O traders must know before filing returns
Do you actively trade in equities? Do you know the tax liabilities required to be met? Filing income tax returns has become more detailed for individuals engaged in intraday and futures & options (F&O) trading in AY 2026-27.
The latest ITR forms now require such taxpayers to make additional disclosures. Thus, it is indispensable for traders to report their income accurately and choose the correct return form for tax submission.
Here are five key points you should consider before submitting your tax returns.
1. Choose correct ITR form
Most intraday and F&O traders are required to file ITR-3, as intraday trading income is treated by the tax authorities as ‘speculative business income’, whereas F&O income is classified as ‘non-speculative business income’.
ITR-2 is designed for taxpayers reporting only capital gains from investments, and ITR-1 is applicable only in limited cases where other essential eligibility conditions are met. Before proceeding with tax submission, you must understand the correct ITR form for your individual case and proceed only after the same. In case of doubts, it is wise to seek professional advice.
2. Report correct business details
The ITR-3 is a document that requires an individual to discuss the correct nature of their business, in accordance with the prescribed business codes. The relevant codes are 21009 for speculation-driven (intraday) trading, 21010 for F&O trading and 21011 for share trading carried on as a business.
It is critical to report the correct business details after the data is matched.
3. Disclose turnover and trading income separately
Unlike earlier years, ITR-3 now mandates a separate reporting of turnover and income generated through intraday trading and F&O transactions, under the trading account schedule. All traders who maintain a clear book of accounts must ensure that these figures tally with their financial records.
Therefore, it is important to disclose key information, facts, turnover and trading income separately.
4. Know when books of account are required
Books of accounts are generally required in case business turnover exceeds ₹25 lakh or net profits exceed ₹2.5 lakh in any of the preceding three financial years. A tax audit might also be conducted or become applicable in specified cases based on the turnover and cash transactions limits.
5. Don’t overlook filing deadline and presumptive taxation rules
For non-audit cases, the due date to file ITR-3 for AY 2026-27 is 31 August. Traders should also exercise caution with presumptive taxation. Filing ITR-4 merely because presumptive taxation is being considered can be incorrect for intraday or F&O income. Choosing the wrong return form could result in unnecessary compliance issues.
With expanded disclosures in ITR-3, intraday and F&O traders should review their trading records, turnover calculations and business classification carefully before filing. Reporting income correctly on the appropriate form can help ensure a smoother filing process and reduce the risk of notices or errors later.
