The Income Tax Department (ITD) has initiated a campaign to send notices to individuals engaged in moonlighting, who have not disclosed their earnings from secondary employment. The ITD's crackdown on moonlighting stems from their belief that such individuals are evading their rightful tax responsibilities.
The ITD has employed various methods to identify moonlighting professionals, including:
Data analysis: The ITD is conducting a thorough analysis of information from various channels, including bank statements, credit card records, and social media posts, in order to accurately identify individuals engaged in moonlighting activities.
Artificial intelligence (AI) is being harnessed by the ITD to aid in the identification of moonlighting professionals. Through AI, vast amounts of data can be swiftly and effectively analysed, enabling the ITD to pinpoint moonlighting individuals who might otherwise remain unnoticed.
Should the ITD flag you as a moonlighting professional, you can anticipate receiving a notice that will require you to elucidate your income. Essential documentation demonstrating your comprehensive income reporting will need to be provided. Failure to furnish such documentation could potentially result in penalties.
It is worth noting that the ITD has intensified its efforts to curb moonlighting professionals in recent times. This heightened scrutiny is driven by the belief that these individuals are not fulfilling their equitable tax obligations. As a moonlighting professional, it is of utmost importance to ensure meticulous reporting of all your earnings to the ITD.
Details from employers: Employers have been called upon to furnish details regarding employees involved in moonlighting endeavours. The ITD is intensifying its efforts against moonlighting professionals and is soliciting information from employers regarding their staff members engaged in such activities.
The ITD is seeking the following particulars from employers including their employees’ names, Permanent Account Number (PAN) details, designation, salary, secondary employment, and earnings from the secondary job, if any.
The employers are obligated to provide this data to the ITD within a 30-day timeframe following the request. In the event of non-compliance, employers might be subject to penalties.
The ITD’s rationale for seeking this information from employers stems from their belief that moonlighting professionals are evading their rightful tax responsibilities. The ITD aims to ensure comprehensive and appropriate reporting and taxation of all income sources, including earnings from moonlighting activities.
Anonymous tips: The ITD is actively receiving insights from the public regarding individuals engaged in moonlighting activities. The Department has established a dedicated online platform where members of the public can provide information about moonlighting professionals.
The ITD is also promoting the option of reporting moonlighting professionals anonymously. This can be accomplished by reaching out to the ITD's helpline or by submitting tips through their online platform.
To enhance its crackdown on moonlighting professionals, the ITD is offering rewards for tips that result in successful prosecutions. These rewards can amount to up to ₹1 lakh.
ITD’s crackdown on moonlighting professionals
Frequently, individuals omit TDS deductions on minor amounts, leading to the absence of income records in AIS, 26AS. Failing to declare secondary career earnings in one's tax return may result in the issuance of an income tax notice.
The ITD is intensifying its efforts against moonlighting professionals who fail to disclose their earnings. With access to diverse data sources, including AIS and 26AS, the ITD can identify these professionals effectively.
Upon identifying a moonlighting professional who has not reported their income, the ITD is likely to dispatch a notice requesting an explanation for the unreported earnings. The individual will be required to furnish supporting documents to demonstrate comprehensive income reporting. In the absence of such documentation, penalties may be imposed. You will need to settle the required tax along with the applicable interest.
Apart, in the event of delayed tax payment, you might incur a penalty. This penalty could necessitate an extra payment, making it unavoidable to circumvent.
It's essential to uphold the necessary practices to steer clear of ITD notices and uphold lawful compliance.
