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There is very little time left to file ITR for the financial year 2022-23. The deadline for filing income tax return is 31 July 2023, which is now just 10 days away. Till now more than 3 crore taxpayers have filed income tax return, but still crores of people have not filed the return. If you haven’t filed your return till now, don’t delay any longer.
Full calculation of moonlighting case
Delay in filing income tax return The main reason is that many people are still unable to file their returns by themselves. This usually happens because the taxpayer does not know how to show income from different sources. Today we are going to tell you about a similar situation, which is known as moonlighting in the corporate world.
What is moonlighting and why do people do it
First of all let’s understand moonlighting. Apart from the job, the work you did for additional income is called moonlighting. In simple words, suppose that you work in a company. Your duty is for 9 hours. You return home after finishing your office work. After that work as a freelance for another company or vendor. Here the work done by you after coming home is called moonlighting and the income earned from it is income from moonlighting. There will be no tax on earnings. Tax on extra income depends on the type of income. Means it is salary income, professional fees or business income. The same formula will be applicable here as well.
Tax will depend on this
If the earnings from moonlighting are received as salary, then in the return it will be shown as ‘Salary’ along with the salary of the main company. It has to be shown in the head. The income made after deduction and exemption will have to be taxed at the rate in which the tax slab falls. You will be able to claim deductions like Standard Deduction, 80C, 80D only once.
If the income from other work is in the form of freelance work or professional fees, then it will come under income from business and profession. Will come This will be taxed like income from business and profession.
Which ITR form to choose
If earning from moonlighting is being received as salary, then it should be shown in ITR-1 Will happen. If the total income is more than Rs 50 lakh, there is any kind of capital gain, then ITR-2 form will be applicable. Similarly, if there is additional income from business or professional fees and opt for the Presumptive Tax Scheme (PTS), then ITR-4 will have to be filed. You can show this income in ITR-3 if the total amount received as professional fee is more than 50 lakhs.
This is how you will get the maximum tax benefit
If you Earnings from moonlighting should be shown as professional fees to avail tax benefits. Its advantage is that the expenditure incurred in this work can be shown as an expense. Apart from this, after calculating tax on income, you should pay all four installments of advance tax on time.
Don’t make the mistake of concealing income
While making company or vendor payments in moonlighting cases Deducts tax ie TDS. This amount is deposited with the government. This means that the information about your earnings reaches the government. In such a situation, instead of hiding the earnings from moonlighting, show it in the return and pay the tax, otherwise the notice of the Income Tax Department may come. This can be considered tax evasion.
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