How to Calculate F&O Turnover (ICAI Method, 2026)
Note: This is general information, not tax advice, and tax rules change. Verify the current figures against the Income Tax Act, the relevant Finance Act and ICAI guidance, and confirm your own position with a qualified Chartered Accountant.
The formula
F&O turnover = Σ |realised profit or loss| per trade or settlement. Take the profit on every winning trade and the absolute value of the loss on every losing trade, and add them all together. That sum is your turnover.
Worked example: futures
Say you took five futures trades this year with realised results of +₹18,000, -₹9,500, +₹6,200, -₹14,000 and +₹3,300. Turnover is 18,000 + 9,500 + 6,200 + 14,000 + 3,300 = ₹51,000. Your net profit is 18,000 - 9,500 + 6,200 - 14,000 + 3,300 = ₹4,000. Notice the turnover (₹51,000) is far larger than the profit (₹4,000); that is normal.
Worked example: options (the premium change)
Options used to be calculated differently. The old method added the premium received on sale of options to the absolute P/L, which inflated turnover sharply for active option sellers. The ICAI 8th-edition Guidance Note (14 August 2022) removed that add-back. For AY 2022-23 onward, option turnover is simply the absolute sum of realised P/L, exactly like futures.
So if your option trades netted out to absolute P/L figures of ₹12,000 and ₹8,000, your option turnover is ₹20,000. You do not add the lakhs of premium that passed through your account on the sell side.
Keep intraday separate
Intraday equity is speculative business income, computed the same absolute-sum way but reported under a different head and tracked separately from F&O. Both count toward your overall audit-threshold picture, but they are not merged into one figure on your return.
Why it matters: the audit thresholds
Turnover decides two things: whether the 44AD presumptive scheme is available (turnover up to ₹2 crore) and whether a 44AB audit applies (above ₹10 crore for fully digital F&O, or via the loss-year trap below that). Use the wrong, inflated broker figure and you can scare yourself into an audit you do not owe. Check your position on the audit checker.
Why your broker number can differ
Many broker Tax P&L exports still add option premium or use a different basis, and none can aggregate across brokers. The fix is to compute turnover the ICAI way on combined data. See why your Zerodha turnover does not match your CA and how multi-broker turnover works. Or upload your statements to Aktai Tax and let it compute the combined figure.
Frequently asked questions
What is the formula for F&O turnover?
Turnover equals the sum of the absolute value of realised profit or loss on each trade or settlement. You add wins and the absolute value of losses together. This is the ICAI absolute-sum method.
Is premium on sale of options added to turnover?
No, not since the ICAI 8th-edition Guidance Note dated 14 August 2022, applicable AY 2022-23 onward. The earlier method added option sell-side premium; the current method is absolute realised P/L only.
Is turnover the same as the value of my contracts?
No. Notional or contract value can run into crores on a small account. Tax turnover is the much smaller absolute-sum of realised P/L, and that is the figure the audit thresholds use.