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Indian TDS Tax Withholding on Upwork Earnings

lenaellis
Community Member

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.



 

492 Comments
abinadab-agbo
Community Member
Prachi is correct, and the clauses you keep quoting only serve to buttress her point.
Upwork cannot know the gross sales of the ecommerce participant (you), because many freelancers also do business outside of UW.
The Indian tax authority shall therefore, refund any taxes that may have been deducted, if they find the ecommerce participant did not hit the minimum threshold. Once such refund is applied, it would have the same effect of no deduction having been made.
prachi163
Community Member

Tax Deduction at Source is very common outside Upwork, too. Most companies that hire contractors, deduct tax at source and provide the tax certificate. This is one way the government reduces the chances of tax evasion.

 

I don't see this as a problem. It's only 0.75%. That is probably much less than the actual IT most freelancers would pay once they declare their annual earnings.

nitinsharma91
Community Member

Prachi T wrote:

Tax Deduction at Source is very common outside Upwork, too. Most companies that hire contractors, deduct tax at source and provide the tax certificate. This is one way the government reduces the chances of tax evasion.

 

I don't see this as a problem. It's only 0.75%. That is probably much less than the actual IT most freelancers would pay once they declare their annual earnings.


Yep filing ITR or TDS deduction is not a problem at all. Vladimir has answered the specific questions I had on the incoming changes on Upwork.

 

My only followup to you was why do you think there is a clause which you suggest can't be implemented at all in reality

odeskrajiv
Community Member

Deleted. Inappropriate content/question.

amanagrawal9
Community Member

My name on upwork profile is Aman**Edited for community guidelines**

but on PAN CARD has name as Aman**Edited for community guidelines**

and bank account name as Aman**Edited for community guidelines**

Everything is 100% as per indian Income Tax rules and Bank laws. no issue for this.

 

But Now my question is how should I fill it in First Name and Last Name in upwork because it doesn't have any Middle name field. Is below correct to update ? 

First Name : Aman 

Last Name :**Edited for community guidelines**

 

Please reply me for this question ASAP, so I can fill in my pan card details.

JoanneP
Moderator

Hi Aman,

 

You may enter your PAN or Aadhaar number in the “Tax Info” section under “Settings. Please fill in the requested information accordingly. 

JoanneP
Moderator

Hi Rajiv,

 

You may enter your PAN or Aadhaar number in the “Tax Info” section under “Settings.”

amanagrawal9
Community Member

Hi Joanne,

 

I want to update my name in upwork, that what I am asking to. I want to update my upwork profile name to same as PAN number, can I do that?

AleksandarD
Community Manager

Hi Aman,

 

One of our team members will reach out to you directly via a support ticket to assist you further.

Thank you.

amanagrawal9
Community Member

Hey,

 

I just want to ask can we withdraw payments in my HUF account?