New Delhi: Many people do moonlighting to earn extra income. Moonlighting refers to the practice of holding more than one job simultaneously. Under moonlighting, people earn from their regular salary and through extra income they receive from another job. This income can be received either as a salary or a professional fee. As per the nature of the income, its tax treatment and ITR form will be different. Let’s take a look at how moonlighting income will be taxed.
Income from Moonlighting
If you are receiving extra income as a professional fee, then it will be treated as income from business and profession. If you are involved in freelance or part-time job, then you will have to show this income under the head income from other sources.
Which ITR to choose?
There are 7 types of Income Tax Return. Usually, a salaried person has to file ITR 1, but people who earn through different sources besides salary, they will have to file different ITR based on the source of their income. As per CA Mohit Aggarwal, who runs Mohit Agarwal & Company (Chartered accountants), an employee involved in moonlighting will have to file different Income tax return in different cases mentioned below:
Case-1: If someone has a total income up to Rs 50 Lakh from salary and interest, then the individual should file ITR 1.
Case-2: If a taxpayer has two employers, but the individual has a total income up to Rs 50 lakh from salary and interest, then ITR 1 can be filed.
Case-3: If a salaried person earns from the sale of shares or other capital gain and interest, then the individual should file ITR-2.
Case-4: If a taxpayer has income from salary, working as a freelancer, and has income from the sale of shares or other capital gain, then ITR-3 will be appropriate for them.
Case-5: If a taxpayer has a total income from salary and works as a freelancer having receipts upto 75 lakh, then the individual should file ITR-4.
Moonlighters who are earning their income from businee and profession should file ITR 3. If your taxable income is Rs 50 lakh or less, and have you have chosen presumptive tax regime, then you can choose ITR-4 Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
