Work as a second source of income? Know how to file tax
Moonlighting has become a topic of debate in the IT industry as working from home these days. While some software companies ban it and some professionals embrace it as a trend.
More importantly, if someone has two jobs at the same time, they will still pay taxes either way.
If you are moonlighting, which ITR form should you follow
If you are a salaried employee, then you will have to file Income Tax Form ITR-1. If you have income from freelancing activities, you will need to amend your ITR form. Income from freelancing will be considered as ‘profession income’ and you will need to file ITR-4.
If you moonlight, how much taxable income will you pay
If you are moonlighting alongside your paid job, then you need to calculate from your second job. For example, if your freelance income is Rs 14 lakh, then you can show your taxable income as Rs 7 lakh. If your salary income of 20 lakh rupees then gross total income will be 7 lakh rupees + 20 lakh rupees = 27 lakh rupees.
After paying the TDS credit, if you have any liability under the tax slab, then only you will have to pay additional income tax, otherwise you will not have to pay tax. You will also avail exemption under 80C and 80D under the Income Tax Act.