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Indian TDS Tax Withholding on Upwork Earnings

lenaellis
Community Manager
Lena E Community Manager Member Since: Apr 7, 2015
1 of 278

Starting October 1st, Upwork will begin withholding Tax Deducted at Source, TDS, from payments to freelancers and agencies located in India as part of a new tax law enforced by the Indian government.

 

As part of our continued efforts to remain compliant with tax laws in India, we are asking that our customers in India provide their Income Tax Identification number in the “Tax Info” section under “Settings”. For purposes of TDS withholding, the Indian government will accept either a Permanent Account Number (PAN) or an Aadhaar number. Please be sure to use the correct format for your PAN or Aadhaar number as defined by the Indian government:


  • PAN is a 10-digit alphanumeric entry, i.e., A A A A A # # # # A
    # = Numeric   A = Alphabetic 
  • Aadhaar is a 12-digit numeric entry


For those freelancers and agencies that have provided a PAN or an Aadhaar number:

We are required to withhold 0.75% of all your payments, starting with the first dollar you earn as of October 1, 2020, and forward it to the Indian government. The rate is scheduled to increase to 1% on April 1, 2021.

 

For those freelancers and agencies that have not provided a PAN or an Aadhaar number:

We will be required to withhold 5% of all your Upwork earnings and forward it to the Indian government. You will be able to claim a tax credit or refund from the Indian government should you pay more taxes than required. 



You will need to add a PAN or Aadhaar number in order to keep the withholding tax at .75% of your earnings.  Click here to Add Income Tax Identification.

 

To learn more about Indian TDS, click here

 

Let us know if you have any questions.



 

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anas0696
Active Member
Mohammad A Member Since: Jun 22, 2020
2 of 278

New rule of withholding TDS for indians is going to start from Oct.1.

So now freelancer earning will be like 20% upwork commission, 0.75% TDS, $1.5/10 connects, $0.99 per withdrawal to local bank, this is so ufair upwork should reduce the commission fee they have imposed, or should provide free monthly connects.

bijujx0a
Active Member
Biju J Member Since: Apr 7, 2015
3 of 278

It is totally unfair charging TDS on the amount upwork takes as service charge.

TDS should be charged only on the amount the contractor receive. That is our earing.

abinadab-agbo
Community Guru
Abinadab A Member Since: Sep 26, 2016
4 of 278

The dead hand of the tax man.

iaabraham
Community Guru
Isabelle Anne A Member Since: May 19, 2014
5 of 278

Abinadab A wrote:

The dead hand of the tax man.


Yeah. This plus the 10%-20% fees, fees for membership, withdrawals, etc. It's just charges on top of more charges.

pathakharsh78
Active Member
Harsh P Member Since: May 6, 2015
6 of 278

Take everything whatever we are earning... Smiley Sad

20% Fees!

Paid Connects to send Proposals!

Withdrawal Fees!

and now TDS withholds!

 

Seems like in near future only paid membership to create an account on Upwork!!

 

kochubei_valeria
Community Manager
Valeria K Community Manager Member Since: Mar 6, 2014
7 of 278

Hi Harsh and others,

 

Thanks for your feedback. Upwork fees help to cover the costs of acquiring new clients and providing services like payment protection, customer support, and platform infrastructure. Regarding, the tax announced here, we are required to forward any tax we collect from our users to the Indian government.

~ Valeria
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bijujx0a
Active Member
Biju J Member Since: Apr 7, 2015
8 of 278

No problem taking TDS. 

TDS should be charged only on the amount that contractors earn

Our earning is what we get after deducting service charge.

shivranjan77
Active Member
Shivranjan K Member Since: Feb 13, 2017
9 of 278

Then upwork must decrease service fee from 20% to 10%.  It's so unfair if this continues people will surely look at a different platform.

bstojadinovic
Moderator
Bojan S Moderator Member Since: Mar 9, 2018
10 of 278

Hi Shivranjan,

 

Freelancers are charged a sliding fee based on their lifetime billings with each client (across all contracts they've ever had with that client's company). Once they have earned $500 with one client their fee will be reduced to 10%. To learn more about our freelancer's fees check out this guide.

 

Thank you!


~ Bojan
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