Part8 Trading Masterclass

Taxes on Options Trading (India)
Income Head: Classified under business income.

Tax Rate: Taxed as per income slab or presumptive basis.

Audit: Required if turnover exceeds ₹10 crore or loss is claimed.

GST: Not applicable to retail option traders.

Always consult a CA or tax expert for compliance and accurate filing.

Risk Management in Options
Key rules for managing risk:

Position Sizing: Never risk more than 1–2% of capital per trade.

Diversification: Avoid putting all capital in one strategy.

Stop Losses: Predefined exit points reduce emotional trading.

Avoid Illiquid Contracts: Wider bid-ask spreads hurt profitability.

Avoid Overleveraging: Leverage can magnify both gains and losses.