New Business Codes in ITR-3 for AY 2025-26: What You Must Know
The Income Tax Department has updated the Nature of Business/Profession codes in the ITR-3 utility for AY 2025–26. The move aims to better capture the income sources from modern and digital professions like F&O trading, share trading, and social media influencers. Choosing the correct code is now more important than ever to ensure correct tax classification and avoid future notices.
Let’s decode the changes and what taxpayers need to do.
Why Business Codes Matter in ITR-3
These codes help the Income Tax Department identify your income source. Misreporting or mismatch can delay processing or trigger scrutiny. The correct code ensures proper applicability of sections like 44AB, 44ADA, etc. This is particularly important for professionals, consultants, traders, and agents in emerging sectors.
New Business Codes in ITR-3 (AY 2025–26)
Here are the 5 newly added codes as per the official ITR-3 utility on incometax.gov.in:
| Code | Nature of Business/Profession | Description |
|---|---|---|
| 09029 | Commission Agents (Kachcha Arahitya) | Agents working under commission, no ownership |
| 16021 | Social Media Influencers | Earning from brand deals, promotions, etc. |
| 21009 | Speculative Trading | Intraday trading or trades settled same day |
| 21010 | Futures and Options (F&O) Trading | Trading in derivatives on stock exchanges |
| 21011 | Buying and Selling Shares | Delivery-based equity trading |
Source: ITR-3 Schema AY 2025–26
Who Needs to Use These Codes?
If you fall into any of the below categories, update your ITR-3 selection:
- You’re a commission agent dealing without title in goods.
- You earn from Instagram, YouTube, or similar platforms.
- You actively trade stocks or F&O on Zerodha, Upstox, etc.
- You engage in intraday or speculative trades.
- You regularly buy/sell shares as a business (not investments).
Impact of Wrong Code Selection
Selecting an incorrect or outdated business code may lead to:
- Income misclassification under the wrong head.
- Inapplicability of presumptive taxation (like 44AD/ADA).
- Risk of scrutiny or mismatch during CPC processing.
- Errors in audit applicability or turnover calculation.
- Difficulty in claiming losses (especially for traders).
Legal & Compliance Insight
- Section 139(1) mandates accurate ITR filing; code mismatch can invalidate return.
- CBDT Notification No. 42/2025 notified updated ITR schema for AY 2025–26.
- Use the correct business code to align with Form 3CD audit reports and AIS/TIS data.
- ITR scrutiny is increasingly automated — avoid default notices by ensuring accurate classification.
How to Update Code in ITR-3
Step-by-step via the income tax portal utility or third-party software:
- Login to incometax.gov.in.
- Open ITR-3 filing utility.
- Navigate to “Part A – General Information”.
- Under Nature of Business/Profession, click “Select”.
- Choose the appropriate code from dropdown (use search option).
- Save and proceed to rest of the ITR.
If you had previously filed under a generic code (like “Other business”), update now to the specific one.
FAQs on New Business Codes
Q1. I’m a part-time YouTuber. Should I select the influencer code?
Yes, if you earn even part-time from social media platforms, use code 16021 – Social Media Influencers.
Q2. What’s the difference between 21009 and 21010?
- 21009 = Speculative (intraday, same-day trades)
- 21010 = F&O or derivatives (held till expiry or squared off)
Q3. Can I file ITR-4 if I’m doing F&O trading?
Only if you opt for presumptive under Section 44AD, and your turnover is within limits. Otherwise, use ITR-3.
Final Thoughts
These new ITR-3 business codes reflect the changing income landscape — from stock traders to social media influencers. Accurately reporting your source of income under the correct code is not just good practice — it’s now a compliance necessity.
Summary
New business codes in ITR-3 for AY 2025–26 cover influencers, F&O, share trading, and commission agents. Use the correct code to avoid mismatches and scrutiny.