Tax Authorities Urge IT Professionals To Disclose Income From ‘Moonlighting’

Tax authorities have raised such concerns when the entire world debating on how far ‘moonlighting’ by employees can be allowed. The tax planners have already been approached by various techies to discuss the manner of disclosure of secondary source of income and minimise the tax burden at the same time

In the on-going a debate on the ethical issues targeting ‘moonlighting’, the income-tax authorities have raised concerns over tax implications earning through additional assignments beyond their regular employment.

Hitting the technology professionals with tax implications, the authorities have requested to disclose any income from ‘moonlighting’ in their tax filings, reported a media house.

The tax planners have already been approached by various techies to discuss the manner of disclosure of secondary source of income and minimise the tax burden at the same time. Trying to figure out if the extra earnings can be treated as professional income, is what concerns them.

Tax authorities have raised such concerns when the entire world debating on how far ‘moonlighting’ by employees can be allowed. Few companies such as Wipro and Infosys have already terminated some of the employees and their services over ethical issues. In many others opinion, allowing the employees to take up gig work subject to direct conflict with their primary job is not a big issue.

The Income-Tax Department might initiate an enquiry soon, if there arise any detection with respect to undeclared income in future which may then possibly result in penalties, according to the taxation experts.

A senior Income tax official explained how an individual or a company making a payment exceeding Rs 30,000 to a person in return for a contract job (under Section 194C of IT Act, 1961) or payment of professional fee (under Section 194J) are liable to deduct tax at source (TDS) at the rate applicable, respectively. Also, TDS will come in force if payments to the person exceed Rs 1 lakh in a financial year under Section 194C.