Loss from Futures trading

POSTED BY Muthu ON August 6, 2012 12:43 am COMMENTS (2)

I got to know that the loss in OPTIONS trade (I brought lots worth 3000rs and lost everything) has to be shown as Business Loss and not Short Term Capital Loss. Hence, ITR4 has to be generated I guess. But, I don’t know how to enter this transaction under Business Loss and under what head. As there are lots of categories under that, can you please guide me how to enter this loss there.
What implications would be there if STT is not paid? I just gave the instructions to my broker to buy the ‘options’ contract. The contract note says all other taxes and charges are paid, and STT=0.
Does this transaction not require STT to be paid?

2 replies on this article “Loss from Futures trading”

  1. Muthu says:

    Hi,
    Might be since the amount is very low, and the STT is a very small fraction, this transaction did not attract STT. Since I did this through ICICI Direct, which usually shows even the smallest fraction in the contract note, I was puzzled. And that’s the reason I posted this question to ask if there may be cases like this.
    Also, since this is the only transaction i made wrt OPTIONS, i have to take an ITR 4. So, I can simply quote this as -3000 is Income from business and not specify any details about the nature of business, Balance sheet, P&L ,etc right?

    Thanks

  2. Dear Muthu, how is it possible that Contract was routed though exchange & no STT was paid? Regarding the ITR-4, please quote these losses as income from business. Please take help of a CA or a tax professional to file your ITR.

    thanks

    Ashal

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