🐈
» Support » Product Release Notes » Indian TDS Tax Withholding on Upwork Earnings
Page options

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
bijujx0a
Community Member

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.

bijujx0a
Community Member

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.

asteranup
Community Member

Hi All,

 

This is with regards to income tax with respect to India.

 

I have a question, how the freelancers' income from upwork in India is considered. Does it come under GST or it comes under income tax as professional income?

 

Please share your thought.

 

Thanks

Anup

NikolaS
Moderator

Hi Anup,

 

Thanks for your question. The GST only applies when both a freelancer and client live in India. The Tax Deducted at Source (TDS) applies to all your earnings, including those from clients in India and around the world.

 

joyjebaraj
Community Member

Hello there,

 

If you can explain the WHT calculation, it will be great. Suddenly find the deduction under WHT. 

 

Please explain. 

 

Regards

 

Joy

 

BojanS
Community Manager

Hi Joy Esther,

 

The amount of tax we are required to withhold is dependent upon whether or not you have a valid PAN or Aadhaar number on file with Upwork:  

  • For Upwork users that have a PAN or Aadhaar on file, we are required to withhold 0.75% of client payments to users. 

  • For Upwork users that do not have a PAN or Aadhaar on file, we are required to withhold 5.0% of client payments to users.

The withholding tax is calculated based on the gross amount that the user invoices their client, so it is calculated prior to freelancer service fees or any other fees that may reduce the amount credited to the user’s account. You can check this help article for more information. 

 

Thank you!

aartichudasama
Community Member

Hello Team,

 

I can see the tax was deducted in my account of the 5% it's wrong you have to deduct of 0.75% because i already updated my Aadhar number in my account.

 

Please check asap do the needful.

 

Please see attached snapshot for your refrence.

 

Thanks.

 

**Edited for community guidelines**

exinox
Community Member

Hello Upwork,

 

Why decduct of 5% Withholding tax? did you check proper in my account. I have alraedy updated my Pan number than why you deduct 5% tax

 

Can you please check proper my tax information before you have to deduct the tax amount.

 

Please see attached snapshot

 

Thanks

 

**Edited for community guidelines**

gagandp
Community Member

I have added my pan number but there are 2 payment coming on 14th october which are deducting 5% of amount. Please fix it and deduct 0.75% of amount.

 

Thanks

 

JoanneP
Moderator

Hi Gagandeep,

 

Upwork will withhold tax on all payments made on or after October 1, 2020. The law requires withholding based on the date of payments made, it does not provide an exception for payments that are related to periods before October 1.