Income Tax and GST impact and some tax saving tips on Moonlighting – best insight relevant for this year 2022-23 and coming years

Lets discuss in brief Income Tax and GST impact and some tax saving tips on Moonlighting. Post pandemic we have been hearing this word a lot “Moonlighting”, it simply means taking up a second job or independent assignment in addition to your main employment. This article will be detail guide on taxation impacts on such person who has been moonlighting.

• Income Tax : Income from Moonlighting must be reported in Income Tax Returns
  • Question arises how income tax authorities will be able to know about the Moonlighting Income ?? Answer is Contractual Payments exceeding 30,000 in single bill or payment in aggregate to single person exceeds 100,000 than the person is required to deduct TDS u/s 194C or if payment are made to professionals or technical consultants than TDS u/s 194J is required to deduct TDS. Also freelancing platforms like Upwork deducted your TDS u/s 194C. So if TDS gets deducted, the income automatically reflects in your 26AS/AIS and same needs to disclosed as Income from Business or Profession.
• GST : GST Registration needs to be obtained if you fall under category of persons who are required to obtain compulsory registration or if turnover exceeds prescribed limits
  • If moonlighting is provided to a registered entity which is located in other state. Then, this becomes case of inter state supply (Place of Supply being address of registered Person) and person has to mandatorily obtain GST registration in case of such Interstate Supply.
  • If moonlighting services are provided in respect of Immovable property (such as architects, interior decorators, surveyors, engineers and other related experts), then place of supply become address of that Immovable property and if same is within the state than GST Registration is required only if turnover exceeds INR 20 Lacs and if same is outside state, then person has to mandatorily obtain GST registration in case of such Interstate Supply.
  • Place of Supply detail guide please refer Chapter V of IGST Act >> https://cbic-gst.gov.in/pdf/IGST-Act-Updated.pdf
• Tax Saving tips on moonlighting
  • Refer article >> https://www.taxledgeradvisor.com/lower-your-taxable-income-up-to-inr-500000-by-using-these-unconventional-chapter-vi-a-deductions-for-f-y-2021-22-f-y-2022-23/

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