I have seen quite a lot of confusion surrounding linear workflow and 3ds Max. This is understandable, as there are many guides online, some with conflicting information. Another confusing stage is how to composite these renders correctly. That is why I have written this guide. I hope it will explain everything you need to know in order to work in a full linear workflow.
For a fantastic technical breakdown on what a linear workflow actually is and why you should care, read this article by Max Attivo here:
http://maxattivo.blogspot.com.au/2011/07/what-is-gamma-correction-in-image.html
Why use a linear workflow?
Using a linear workflow results in images that better match how the human eye perceives the world. Essentially, using a linear workflow makes it possible to have a more realistic output. As an added benefit in some cases, using a linear workflow can reduce calculations needed for rendering, therefore speeding up your render time. This is accomplished by more accurately displaying light falloff and travel distance, meaning you may not have to increase GI samples or depth to get correct illumination.
So that all sounds great, but how do you do it?

Fig. 01
Part 1: Setting up 3ds Max
Recommended Gamma and LUT Settings (found under Customize > Preferences- > Gamma and LUT) can be seen in Fig.01. Here's a breakdown of the settings:
1.
Enable Gamma/LUT Correction: Enabled. This tick box tells 3ds Max to use the Gamma Correction. To work with a correct linear workflow, we want this activated.
2.
Gamma: 2.2. This is the display Gamma. It tells 3ds Max what gamma to display for your viewport and in the Render Frame Buffer. You could leave this at 1.0, but by making sure it is set to 2.2, you enable gamma correction as a preview only. In other words, setting this to 2.2 doesn't affect render output. When you save your files, they will still be Gamma 1.0, but you are more easily able to understand what the final color corrected output will look like (Fig.02a – 02b).
Fig.02a – Gamma: 1.0. This shows the gamma of the final output when everything else is set up properly, but can make choosing and adjusting colors and tones difficult.
Fig.02b – Gamma: 2.2. This shows how your final output will look when corrected to a gamma of 2.2, when everything else is also set up correctly. Essentially, this means what you see is what you get.
3.
Affect Color Selector and Affect Material Editor: Enabled. When both of these options are enabled, the Gamma setting affects the display of colors on the standard 3ds Max Color Selector, the Object Color dialog and in the Material Editor. This means when selecting colors and viewing materials they will match the final output when it has been corrected to a gamma of 2.2 (Fig.03a – 03d).
Fig.03a – Affect Color Selector: Disabled. Colors are displayed with a gamma of 1.0. This means any color you choose will be brighter than expected when rendered and gamma corrected to 2.2.