The deadline to file income tax returns (ITR) for the Assessment Year 2026-27 is inching closer. As taxpayers gather all documents and begin the process of filing their returns, futures and options traders will need to be extra careful. The revised ITR-3 form requires separate reporting of profits and derivatives turnover. Leaving these columns blank can result in a defective return.
The change aims to improve data matching under the Annual Information Statement (AIS). It marks a shift from the previous practice, where F&O trading results were coupled with broader business receipts.
What's New In ITR-3 Form For F&O Traders?
The revised ITR-3 form was notified by the Central Board of Direct Taxes (CBDT) on March 30, 2026. One of the biggest changes in the document is the addition of new columns under "Schedule Part A - Trading Account", which did not exist in the previous year's form.
The following columns have been added:
- Turnover from F&O trading.
- Income from F&O trading credited to the profit and loss account.
If taxpayers take part in intraday trading, they need to disclose the turnover from intraday trading and the income from intraday trading transferred to the profit and loss statement.
Additional disclosures regarding residential status, filing status and address details have been introduced. Non-residents must provide information such as foreign tax identification numbers and details about their stay in India. The threshold for reporting assets and liabilities has been increased from Rs 50 lakh to Rs 1 crore.
The revised form also puts forward reporting requirements for high-value transactions. Taxpayers with income below the taxable limit may have to give details if they spent over Rs 2 lakh on foreign travel, deposited over Rs 1 crore in bank accounts, or incurred electricity expenses exceeding Rs 1 lakh.
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What Happens When One Misses These Details?
Missing out on adding information can lead to serious consequences. If the deficiencies are not rectified within a particular timeframe, the return may be treated as invalid. This can potentially affect tax compliance and other benefits that are available to taxpayers.
For non-audit cases, the deadline for filing ITR-3 is August 31, 2026. Taxpayers whose accounts are subject to audit need to submit their return by October 31, 2026.
Income or loss from F&O is seen as a non-speculative business income by the Income Tax Department. Taxpayers must declare such income or loss under the head Profits and Gains of Business or Profession (PGBP). Gains from F&O are taxed at individual slab rates.
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