Income from trading in futures and options i.e. F&O is a Non-Speculative Business Income while Income from equity intraday trading is a Speculative Business Income. As per the income tax rules to set-off loss, Non-Speculative Loss can be set-off against any income except Salary Income and Speculative Loss cannot be set-off against any income except Speculative Profit.
F&O Loss cannot be set-off with Salary Income. It can be set-off with Business Income, IFOS Income, House Property Income, and Capital Gains.
Intraday Loss cannot be set-off with Salary Income. It can be set-off with Speculative Business Income only.
The remaining F&O loss (Non-Speculative Loss) can be carried forward for 8 years. It can be set off against future Business Income only i.e. both Non-Speculative Profit and Speculative Profit.
Intraday Loss can be carried forward for 4 years. It can be set off against future Speculative Profits only.