If i buy axis bank future and option of the month. Then i need to sell it on the last thursday of the month. If i donot sell the both future and option positions till the expiry. What will happen

General
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if you does not sell them on the last day of expiry , they will get automatically square off.

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It will not get squared off, but will be settled for you by the exchange. Square off happens at premium price, but after expiry only settlement takes place, no square off happens. Square off price and settlement price are different things.

  • Settlement price for futures (in case of profits) = [Closing Price of underlying index/stock] - [Your future price at which you have bought]
  • Settlement price for options (in case of profits) = [Closing Price of underlying index/stock] ~ [Your strike price] Difference amount in case CE or PE. Also you need to pay higher STT%, since you have let the option to expire by itself and not squared off.
  • Settlement price for futures (in case of loss) = [Your future price at which you have bought] - [Closing Price of underlying index/stock] This amount will be taken away from the margin blocked and remaining money from margin will be given back to you
  • Settlement price for options (in case of loss) = You get nothing. Whatever premium you get paid is lost.
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is there any penalty from exchanges …if they are automatically squared off

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on futures there is no penalty but be careful in options on STT trap , if your options is in the ITM and you let them automatically square off , you will be charged high STT,