Many professionals who earned income outside of their normal salary but did not mention it in their tax forms have received letters from the income-tax department. The majority of the warnings were sent out for the 2019–2020 and 2020–21 fiscal years.
The revenue from the so-called moonlighting, or job outside of a full-time job, was larger than the normal salary in a lot of instances.
The tax department’s system was able to readily identify these unreported profits during data analysis because the majority of the payments were made online and some were received from foreign accounts. According to a senior official speaking to media, “We have found a significant number of instances of IT, accounting, and management professionals who were receiving monthly or quarterly payments from two or more companies but were declaring income only from their full-time job in their income tax returns.”
Notices were addressed to those in the first phase when the average annual undeclared payments ranged from 5 to 10 lakh rupees.
According to officials, these incidents increased between 2019 and 2021’s fiscal years. More than 1,100 individuals have received notices from the government thus far.
Many times, according to the firms, the department was notified by the companies themselves that their employees were engaging in such practises and had the required Permanent Account Numbers (PAN).
Also read, Vijay Shekhar Sharma to buy 10.30% stake in Paytm from AntFin.
More notices from Income Tax Department on the way?
The department anticipates a further increase in the number of notices even though data for the fiscal year 2021–2022 has not yet been analysed.
According to the senior official previously mentioned, people do not receive tax notices for doing other jobs but rather for inaccurately registering their income, which in some cases is double what they were receiving from their wage. According to officials, they are also investigating into instances where cash payments were made.
During the pandemic, working a second job on top of a full-time employment became increasingly common, particularly in the IT industry.
For more business news, click here.
