Can F&O losses be carried forward if accounts are audited, even without a tax audit requirement?

A salaried individual with F&O losses in FY 2024–25 assumed that the September 31 tax audit deadline applied to him. But what is the actual ITR due date when a tax audit is not required? Ask Wallet Wise decodes the correct return filing deadline for such taxpayers.

Moneycontrol’s Ask Wallet Wise initiative offers expert advice on matters of personal finance and money. You can email your queries to askwalletwise@nw18.com, and we will try and get a top financial expert to address your queries.

I am a salaried individual. Last year, I started dealing in the share market. During the financial year 2024–2025, I incurred a loss of around Rs 25 lakhs in F&O transactions. As per the provisions of Section 44AD, a minimum of 8%/6% of turnover should be offered as profits for taxation. Otherwise, the taxpayer must get their accounts audited and furnish the audit report one month before the due date of filing the ITR, which is by 30th September (since the ITR due date is 31st October 2025). Accordingly, I obtained and uploaded the tax audit report on 23rd September 2025.

Now, I am being told that I will not be able to carry forward the loss, as my actual due date was 16th September 2025 (as extended), and not 31st October 2025 as I had originally believed. This has left me confused. Please help me.

Expert Advice: If the losses of the current year cannot be fully set off against other income of the same year, the unabsorbed losses can be carried forward for set-off against future income, provided the Income Tax Return (ITR) is filed by the due date. Different due dates are prescribed under the law. For the general category, the due date for filing ITR for FY 2024–2025 was 16th September 2025 (extended).

In case a taxpayer is required to get their accounts audited under the Income Tax Act or any other law, the due date, as of now, is 31st October 2025. However, the due date does not get extended automatically merely because one has obtained and filed an audit report when not legally required to do so.

Based on the facts stated by you, Section 44AD does not apply. This section requires a person to get their accounts audited if profits from business are lower than prescribed or if a loss is incurred, provided the person had opted for Section 44AD in any of the five preceding years and their total income exceeds the basic exemption limit.

Since FY 2024–2025 was your first year of F&O transactions, it is clear that you have never opted for Section 44AD. Therefore, you were not required to get your accounts audited and file an audit report. The due date for you was 16th September 2025, regardless of the audit you voluntarily obtained. As you did not file your ITR by this due date, strictly speaking, you are not allowed to carry forward your F&O loss for set-off against business income in subsequent years.

Whether you will actually be able to carry forward the F&O loss depends on how the ITR utility is configured. In my view, the utility may not be designed to detect cases where a taxpayer, though not required to be audited, voluntarily undergoes an audit and assumes 31st October 2025 as their due date. Hence, it may still allow you to carry forward the losses.

Disclaimer: The views expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

Ask Wallet-Wise