New Rules of ITR: The Income Tax Department has now introduced new changes regarding the ITR-3 and ITR-4 forms. Five new professional codes have been created which includeearning from social media and YouTube (content creators, influencers, YouTubers), commission agents, speculative traders, and traders dealing in futures and options.

What does this mean?

The professionals are now required to furnish greater details of their earnings. The individuals concerned will have to select the right form (ITR-3 or ITR-4) based on their profession. The new codes have been included in both offline and online form filling options.

New social media influencers rules:

For them, the new code 16021 was created. This is meant for those who promote or advertise through social media or create digital content for payment.

An influencer will now have to select either ITR-3 or ITR-4 (Sugam) form based on their earnings and the tax option chosen.

An influencer who wants to avail of the tax benefits on the income claimed under presumptive income (section 44ADA) will have to file ITR-4. Tax filings for digital professionals such as online trainers, bloggers, or coaches will become streamlined.

Guidelines for stock market commerce directors

A new code 21010 has been added for F&O traders. These traders will be required to furnish complete details of their income and profits as well as losses in ITR-3. This will enable the department to know their actual income and efficient tax collection will be facilitated.

What drove these modifications?

1. Simplicity of outlining: In the past, numerous influencers or traders would pay their tax in the ‘other’ category. To the department, it was impossible to determine what income-generating activities these individuals were engaged in. The different codes will solve this problem.

2. Avoiding tax evasion: Wrongful tax evasion by filing under different categories, or fictitiously lowering income by not declaring income is made possible by these different category codes.

3. Oversight is straightforward: These high-earning professionals will be easier to monitor.

4. Expanding economy: In the last two years, the rate at which individuals making over 20 lakh rupees a year has skyrocketed. There are individuals earning 2 to 5 crores; and some are even estimated to have hundred crores in assets. These numbers mandated incorporation of these individuals into the tax system.

Compilation of new codes

Business or Profession

09029 Commission Agent

16021 Social Media Influencer

21009 Speculative Trading

21010 Futures-Options Trader (F&O)

21011 Buying and Selling of Shares

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