Income Tax Department Cracks Down on Moonlighting Professionals: Notices Issued for Unreported Income

In a recent development, the Income Tax Department has intensified its efforts to ensure tax compliance, targeting moonlighting professionals who earn from multiple sources. These professionals, who juggle a primary job alongside a secondary one, have come under scrutiny for failing to declare their additional income and fulfill their tax obligations.

 

As the pandemic forced many to adapt to remote work, a surge in moonlighting became apparent. However, this surge has not been matched by an equivalent increase in tax reporting. The consequences have now caught up with these individuals, as the Income Tax Department has initiated the process of sending notices to those who have not paid taxes on their secondary income.

 

Renowned tax expert, Gauri Chadha, sheds light on the situation, explaining that often individuals neglect to deduct TDS on modest earnings. Consequently, these earnings do not get reflected in AIS 26as, the consolidated statement of tax deductions. Neglecting to include secondary income in one's tax return leaves the door open for potential income tax notices.

 

In a significant departure from previous practices, the Income Tax Department is now also emphasizing the collection of interest on unpaid taxes. It's no longer sufficient to merely pay the due taxes; interest must also be paid as part of the settlement process.

 

If you find yourself among those receiving such notices, the onus is on you to demonstrate that your secondary income isn't your primary livelihood. Conversely, if your moonlighting activities constitute a significant part of your earnings, it's imperative to fulfill your tax obligations accordingly. Addressing the notice promptly and accurately is essential to navigate this situation.

 

Failing to comply not only results in paying the outstanding taxes and interest, but it also opens the door to penalties. Those who have remitted their taxes later than the stipulated time might find themselves subject to additional penalties, further straining their financial situation.

 

As the Income Tax Department tightens its grip on moonlighting professionals, the message is clear: accurate and timely reporting of all income streams is vital. Avoiding penalties and ensuring a smooth tax journey hinges on understanding and adhering to these new regulations.