Taxes

Business Income (F&O Taxation)

The tax classification typically applied to F&O trading profit/loss in India — added to total income and taxed at the individual's slab rate, unlike capital gains.

F&O trading income/loss is typically classified as business income under India’s Income Tax Act, rather than capital gains. Business income is added to total taxable income and taxed at the individual’s applicable slab rate, a different framework from the capital gains rules that apply to simple stock investment.

See the full explanation with a comparison to capital gains in How F&O Trading Is Taxed in India: A Complete Beginner’s Guide.