ITR Tips: Keep these things in mind while filing ITR for moonlighting..
If you also do moonlighting apart from doing office work, then this article is of your use. Often people hide their extra income to avoid income tax. If you are found doing this, then a notice can be sent by the Income Tax Department.
What is Moonlighting?
When we earn money by doing freelance or any other kind of work in addition to our regular earnings, then it is called Moonlighting. In simple language, the extra income we earn apart from the salary we get every month is called Moonlight. Those who do this are called Moonlighters.
How is tax levied on Moonlighting?
Income earned through moonlighting can be received as salary or professional fees/business income. It is necessary to pay tax on this income as well. If income from moonlighting is received in the form of salary, then tax is levied on the total income of the person as per the applicable tax slab. Moonlighting income from freelancing, consultancy, or any other type of self-employment is taxed differently.
Which form is required?
There are different rules regarding the income earned from moonlighting. If you are getting this money as a salary, then it has to be shown in ITR-1. If the total income is more than Rs 50 lakh or it is some kind of capital gain, then an ITR-2 form will be required. If you have charged money from the client as professional fees, then ITR-3 will have to be filled for this. At the same time, ITR-4 will have to be filled for additional income from business or professional fees.
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