Moonlighting? Now you might have to pay more tax; here to know everything

The debate around moonlighting grabbed headlines in the IT industry after top IT companies like Wipro, Infosys and TCS have been raising concerns of late about moonlighting, .

In its latest reports by Economic Times, The Income Tax (IT) authorities have cautioned that moonlighting can have some tax implications.

Several techies have already reached out to their tax planners, discussing with them how to declare this secondary source of income and how to minimise their tax burden. They are also trying to understand whether the extra earnings can be treated as professional income.

The principal chief IT commissioner, Tamil Nadu, Puducherry and Kerala, R Ravichandran, said that any company or individual pays over ₹ 30,000 to a person for a contract job or pays a professional fee is liable to deduct taxes at source (TDS) at the applicable rate.

According to Section 194C of the Income Tax Act, any individual who gives a fee to a residential individual for carrying out contract work must deduct TDS.

Here, the individual making the payment can be a firm, trust, company, or local authority, among others.