F&O turnover is computed on your trades, not your capital or your net result — so a loss year can still cross the Section 44AB threshold. Send your broker P&L and we'll tell you where you stand, free.
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Need help? Call / WhatsApp +91 93269 18797this is the single most misunderstood number in trader taxation — and it's why traders miss the audit requirement.
Not this
Your total buy + sell contract value, or your net profit/loss for the year. A trader with ₹5 crore in contract value but a ₹40,000 net loss often assumes turnover is low or negative — it isn't measured that way at all.
Actually this
The sum of the absolute profit or loss on every squared-off trade. A ₹40,000 gain on one trade and a ₹25,000 loss on another add up to ₹65,000 of turnover — not ₹15,000. Across hundreds of trades, this adds up fast.
This is why a trader can show a net loss for the year and still cross the ₹1 crore / ₹10 crore threshold that triggers a tax audit. We compute this directly from your broker's contract notes or P&L export — you don't need to work it out yourself.
01
Your turnover crosses ₹1 cr / ₹10 cr
Computed the way described above — profit and loss added, not netted. This is the primary trigger regardless of whether you made money.
02
You opted for presumptive income before
If you declared income under Section 44AD in any of the last 5 years and now show a loss or lower profit, audit can apply even below the turnover threshold.
03
You want to carry the loss forward
A business loss can offset future profits for 8 years — but only if the return (and audit, where applicable) is filed on time. Miss it, and the loss is gone for good.
F&O Trader Package
one-time · turnover calc + audit (if applicable) + ITR-3
Not a trader, or need a plain audit-only / audit+ITR bundle instead? See full pricing on the main tax audit page.
Broker P&L statement
Annual P&L / tax P&L export from your broker for FY 2025-26.
Contract notes / ledger
If P&L alone doesn't break down every trade, we'll ask for these too.
Bank statements
For any income outside trading — salary, freelance, or business.
Prior year's ITR
Especially if you declared 44AD presumptive income before — it changes your audit trigger.
I made a loss on F&O — do I still need a tax audit?
A loss alone doesn't decide it — turnover does. If your F&O turnover (sum of profit and loss per trade) crosses ₹1 crore (or ₹10 crore where cash transactions are minimal), audit applies whether you made a profit or a loss. It can also apply if you declared presumptive income under 44AD in an earlier year and now show a loss.
How is F&O turnover actually calculated?
Turnover is the absolute sum of the profit or loss on each settled trade — a ₹40,000 profit on one trade and a ₹25,000 loss on another add up to ₹65,000 of turnover, not ₹15,000 net. This is why turnover can be large even when net trading results are small or negative.
Why does an audit matter for carrying forward my F&O loss?
A business loss can be carried forward for 8 assessment years and set off against future business income — but only if your return is filed by the original due date. If audit applies to you and you miss the deadline, you risk losing that carry-forward along with the Section 271B fee.
I trade F&O and also hold long-term investments — does that change anything?
F&O and intraday trading are business income (ITR-3), while long-term stock or mutual fund holdings are typically capital gains. Only your trading turnover counts toward the 44AB threshold — but both need to be reported correctly in the same return.
What if I don't know my exact F&O turnover?
That's normal — most traders don't compute it themselves. Send us your broker's P&L or contract notes and we calculate your turnover and tell you within minutes whether Section 44AB applies.
upload your broker P&L and we'll tell you within minutes whether audit applies.
Not a trader? See the main tax audit page →