This farmer lost money on F&O trading and now faces a ₹69 crore tax demand

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Subscribe to enjoy similar stories. This is the story of how a small oversight—failing to report trades in his income tax return (ITR) due to lack of awareness—spiralled into a massive tax dispute. The protagonist, a farmer from a small town near Bengaluru, is now facing a staggering ₹69 crore tax demand.

The man did not wish to be identified, so we will refer to him as AN for ease of narration. What began as a brief stint in futures and options (F&O) trading a decade ago has turned into a financial nightmare, with frozen bank accounts and mounting tax penalties. Here’s how it all unfolded.

AN did not report the F&O and share trading done in the financial year 2014 in his income tax return (ITR) as he thought it was not required since did not make profits. “I incurred a loss of about ₹26 lakh," he toldMint. In December 2024, AN’s UPI payments started failing for three consecutive days.

He visited his bank and learned that his savings account was frozen and a lien of ₹69 crore marked on it by the tax department. “I was totally clueless as to where the ₹69 crore lien could come from," he said. AN approached a Bengaluru-based chartered accountant (CA), Mahesh.

“The IT department took this dire step after not getting response from AN on notices and tax demands sent to him in relation with F&O and share trades he did in FY13-14," Mahesh, who insisted on using only his first name, told Mint. In FY14, AN traded in F&O through a broker friend. Since online trading was not as advanced as it is today, AN had authorised the broker friend to trade on his behalf.