Income Tax Department started sending notices to moonlighting professionals

Have you been working a second job? Did you receive additional money from a job other than your normal work but fail to include it on your tax return? According to a source, the Income Tax Department has been delivering notices to a number of professionals who have neglected to record additional incomes above their normal salaries on their tax returns.

According to reliable sources cited in the report, a significant number of notifications related to the financial years 2019-2020 and 2020-2021.

During the pandemic, moonlighting became popular, particularly in the IT sector, as distant employees sought additional work in addition to their core positions.

In other cases, income from supplemental employment – often known as moonlighting – was more than the compensation from the principal full-time job. Many of these hidden revenues, including money from overseas accounts, were moved online. According to the report, the tax department’s automated technology efficiently discovered these undeclared earnings during data processing.

As stated by a senior official, a considerable number of cases involving IT, accounting, and management specialists who got monthly or quarterly pay from numerous organisations were discovered. In their tax returns, these professionals solely reported their full-time employment income. Notices were initially sent to persons with an annual undeclared income of between Rs 5 lakh and Rs 10 lakh.

Authorities indicated that incidents of this sort were particularly common over the financial years 2019 to 2021. So far, the agency has issued over 1100 notifications. Companies supplied correct Permanent Account Numbers (PAN) to the government in specific instances, alerting them to personnel engaging in such actions.

Although the research for the financial year 2021-2022 is not yet complete, it is expected that the number of notifications will grow. “People are getting tax notices not for moonlighting, but for incorrectly declaring their income, which in some cases is double what they were getting from their salary,” revealed the aforementioned senior official. Cash payments are also being investigated by officials.