The Income Tax Department has introduced a new business/profession code—21011: “Other Services – Buying and Selling of Shares”—in the updated list of business codes for Income Tax Return (ITR) filing, providing a dedicated classification for taxpayers engaged in the business of delivery-based share trading.
The newly introduced code appears alongside 21009 for Speculative Trading (intraday equity trading) and 21010 for Futures & Options (F&O) Trading, reflecting a more granular classification of different forms of securities trading in the ITR utility. Tax professionals believe the dedicated codes are intended to improve data reporting and facilitate better compliance by distinguishing various categories of trading activities.
The update has drawn attention from tax practitioners, many of whom believe the addition may have gone unnoticed by several professionals preparing returns for Assessment Year 2026-27.
However, the introduction of the new code has also reignited debate over the appropriate tax treatment of delivery-based share transactions. Some tax experts have cautioned that merely introducing a dedicated business code does not automatically make reporting such transactions under the head “Profits and Gains from Business or Profession (PGBP)” the preferred approach in every case.
One tax professional noted that despite the availability of the new code, they generally do not disclose transactions involving listed shares under PGBP due to practical compliance concerns arising from the Income Computation and Disclosure Standards (ICDS), particularly ICDS-VIII dealing with Securities.
Under ICDS-VIII, securities held as stock-in-trade are generally required to be valued security-wise, in aggregate, at the lower of actual cost or net realizable value (NRV) at the end of the financial year. According to practitioners, implementing this requirement can become challenging because broker statements often do not readily provide the precise acquisition cost for each security remaining in closing stock, making year-end valuation cumbersome.
Experts say that taxpayers must carefully evaluate whether delivery-based share transactions should be treated as capital gains or business income, based on the facts and circumstances of each case, established judicial principles, and the applicable tax provisions. The availability of a specific business code does not, by itself, determine the head under which income should be assessed.
The revised business code list reflects the Income Tax Department‘s broader effort to improve the classification of business activities and enhance the accuracy of return filing through more specific reporting categories. Tax professionals expect the new codes to reduce ambiguity for traders while also enabling better data analytics and scrutiny where required.
Read More: JURISHOUR | TAX LAW DAILY BULLETIN : 12 JULY, 2026
