Moonlighting Professionals Under I-T Scanner For Undeclared Income: Report

The I-T department has sent over 1,100 notices to professionals who earned more income than their regular salary and did not declare their tax returns

The tax authorities were able to trace moonlighting income as most of the payments were made online and some were received from foreign accounts. 

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The income tax department has started sending notices to professionals who earned more income than their regular salary and did not declare it in their tax returns. The income tax department has sent more than 1,100 notices issued so far, reported the Economic Times on Tuesday citing people familiar with the matter. Most of the issued notices were for the financial years 2019-2020 and 2020-2021. 

The report also noted that in a number of cases income from jobs outside full-time employment or from moonlighting was higher than regular salary. The tax authorities were able to trace these incomes as most of the payments were made online and some were received from foreign accounts. 

A senior official told ET, “We have found a large number of instances of IT, accounting and management professionals who were getting payments monthly or quarterly from two or more companies but were declaring income only from their full-time job in their income tax returns.” 

According to the report, in the first-phase notices were sent to individuals whose undeclared annual payments ranged between Rs 5 lakh and Rs 10 lakh. Officials said that instances of moonlighting were more common from fiscal years 2019 to 2021. A number of businesses notified the I-T department that their employees were engaging in such behaviour while using proper Permanent Account Numbers (PANs).

For the financial year 2021-22, the income tax department is yet to analyse data. They expect that the number of notices will rise, the reported noted. 

“People are not getting tax notices for moonlighting, but for incorrectly declaring their income, when in some cases it is double of what they were getting from their salary,” the senior official said. Adding that cash payments are also being investigated. 

Moonlighting refers to employees taking up side gigs to work on more than one job at a time. The trend became more common in the Indian job sector during and after the pandemic. It made headlines after severe backlash from several IT firms such as Wipro. Companies opposed the practice, saying that employees doing multiple jobs can impact their productivity