New ITR Rules: Big news! New ITR rules for social media creators and these people – Details
If you earn from social media, YouTube, F&O trading, commission agency, speculation or share trading, then now you will have to use the new codes while filing income tax return (ITR) and give full details of your income in the correct form (ITR-3 or ITR-4). This will increase transparency in paying tax and prevent tax evasion.
New ITR Rules: The Income Tax Department has made a big change in the ITR-3 and ITR-4 forms. Five new professional codes have now been added to these forms. These include those earning from social media and YouTube (content creators, influencers, YouTubers), futures and options (F&O) traders (in the stock/commodity market), commission agents, speculative traders and those buying and selling shares.
What does this mean?
Now these professionals will have to give complete details of their income. They will have to fill the correct form (ITR-3 or ITR-4) according to their work. These new codes have already been added to the offline and online methods of filling the form.
Rules for social media influencers:
A new code 16021 has been created for them. This code is for those who earn money by promoting, advertising or creating digital content on social media.
Influencers will have to file either ITR-3 or ITR-4 (Sugam) form depending on their income level and tax election.
If an influencer wants to avail tax benefits on presumptive income (Section 44ADA), he will have to file ITR-4. This will increase transparency in tax filing of digital earners like online coaches, bloggers.
Rules for stock market traders
A new code 21010 has been added for F&O traders. These traders will have to give full details of their income, profit and loss in the ITR-3 form. This will let the department know their real earnings and tax collection will be better.
Why were these changes made?
1. Ease of identification: Earlier many influencers or traders used to pay tax in the ‘other’ category. It was difficult for the department to know from what work they were earning. This problem will end with different codes.
2. Preventing wrong information: Some people used to try to save tax by choosing the wrong category or hiding information. It will be difficult to do so with a different code.
3. Monitoring is easy: It will be easier for the department to keep an eye on these high-earning professionals.
4. Rapidly growing sector: In the last 2 years, the number of people earning more than Rs 20 lakh annually from social media has increased rapidly. Some people earn 2-5 crore rupees or even more and some have assets worth 100 crore rupees. It was necessary to bring such people under the tax net.
List of new codes
Code Profession / Business
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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