Taxpayers who executed even one intraday or F&O trade in FY 2025-26 now have until August 31 to file their ITR for Assessment Year 2026-27. This change under the Finance Act, 2026, separates business income from standard salary filings. Investors must correctly classify these transactions to avoid potential compliance issues.
The Income Tax Department has set a deadline of August 31 for individuals who earned business income during the 2025-26 financial year. This extension specifically applies to those who conducted at least one intraday stock trade or engaged in futures and options (F&O) contracts. While salaried individuals without such trading activity generally follow the July 31 deadline, this reclassification under the Finance Act, 2026, provides additional time for traders to calculate their business income.
Classification of Trading Income
The tax laws treat different types of market activities in specific ways. Intraday trading is officially classified as speculative business income. Any profits are added to your total income and taxed according to your applicable slab rate. Importantly, losses from speculative trading can only be balanced against speculative gains, meaning they cannot be used to offset other types of income like salary or rental earnings. On the other hand, futures and options trading is categorized as non-speculative business income. This classification applies regardless of whether the trader took physical delivery of the shares or settled the contracts in cash.
Turnover and Audit Requirements
While the August 31 deadline provides relief for many retail traders, those whose trading turnover exceeds the threshold for a tax audit face a different timeline. If your trading turnover crosses the mandatory audit limit set by the Income Tax Act, you are required to file your return by October 31. This same extended date applies to professionals, such as doctors or consultants, whose financial records require a formal audit. Accurately calculating turnover is critical for traders, as it determines the specific ITR form required and the applicable filing deadline.
Compliance for Investors
For investors who may also hold a regular salaried job, the inclusion of trading income changes the filing requirements. You must report your trading gains or losses under the head of business income rather than capital gains. Using the wrong ITR form or failing to disclose business income can lead to scrutiny from tax authorities. Investors should ensure that all contract notes and statements from their brokers are reviewed before finalizing their returns. If your accounts do not require an audit, August 31 is the date to mark on your calendar for the current assessment year. For those who do require an audit, tracking the October 31 deadline remains the primary focus.