My CA has advised me that for trading in Derivatives the Income/Loss has to be filed under the head of "Speculation Business". Also if the total of Profit & Loss under this head excees Rs. 60 Lakhs(for Company) then you need to go in for tax audit. (limits may be different for Individuals though!).
Actual taxation as per category of person (Individual, Partnership, Company etc.) that your trades will fall under.
Also see "http://www.traderji.com/taxation-matters/30837-accounting-entries-taxation-stocks-f-o-thread-settling-these-issues.html"
Sridhar
