Many employees practice moonlighting for earning some extra money while working with their current organisation. They have been sent notices by the Income Tax Department as they are earning more than their regular salary and were not disclosing the income in tax returns. Among these notices, most of them were related to the financial years 2019-20 and 2020-21, as per the sources.
In certain cases, the income generated from moonlighting, or working for someone else outside the organisation where they are employed full-time was more than their regular salaries.
Since most of the payments received were through online payment gateways and some were transacted through overseas accounts, as detected through the advanced data scrutiny by the Income Tax Department.
According to a senior official, they have identified a big number concerning such cases in the IT sector, accounting, and management field. The professionals working in these domains were receiving income on a monthly or quarterly basis from more than one company. However, the moonlighting employees were not disclosing this income in their returns. Only income generated from their full-time job was declared in their returns.
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Individuals whose average undeclared annual income ranged between ₹5 lakh and ₹10 lakh notices were sent in the first phase.
In the fiscal years 2019-2021, there were more such cases found, according to officials. There are 1100 professionals so far who have been sent notices by the department.
In various instances, organisations themselves notified the department about their employees and said they get services from them and have also provided proper Permanent Account Numbers (PAN), said the officials.
The number of such cases is expected to rise in the financial year 2021-22 as the department has yet to analyze the data for that FY.
The official further said that professionals are not receiving notices for moonlighting, but for showing their income incorrectly. Even in some cases, they are generating double the amount they have disclosed salary in their returns. Payments made in cash are also under the radar of the tax department.
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During the pandemic, moonlighting became quite popular and most of the employees were from the IT sector working from home during that particular period.
What is Meant by Employee Moonlighting?
When an employee moonlights, he or she works more than one job at a time. Moonlighting employees usually work two jobs, a full-time job and a part-time job, although some use the term to refer to anyone who works for more than one company at the same time. There are most moonlighting situations that necessitate an employer developing a moonlighting policy when the moonlighting employee is employed in a primary and secondary role.
