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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
aartichudasama
Community Member

Hello Team,

 

I did mailed you two times about tax withholding but i didn't get any response from your side.my question was why the upwork deduct 5 percent taxes? i have already updated my Aadhar number. than why it's happen to deduct  5 percent tax? as per upwork rules upwork should deduct only 0.75 percent.

 

Can you plaese check asap?

 

Thanks

AleksandarD
Community Manager

Hi Aarti,

 

I'm sorry for the delay. We are checking with the team and will update you as soon as we have more information.


Thank you for your patience.

chauhan16
Community Member

Hi,

 

I've earn $73.67 on last week cycle. Now I've only $0.55 in pending,

 

Transactions history:

Withholding Tax - Ref ID 330830911 --- ($0.55)

Service Fee for Hourly - Ref ID 330830911---- ($7.37)

Invoice for 09/28/2020-10/04/2020 -- --- $73.67 -----REF-ID -330830911

 

Can anybody help me with this?  I don't understand why this much about is deducted as TAX ?

 

Regards,

Chauhan V

BojanS
Community Manager

Hi Chauhan,

 

We're checking this with our team and will get back to you once we have more information. We appreciate your patience while we look into this.

68e56446
Community Member
The pending will stay pending for three months. It’s 0.75% tax deducted from your total payment. The TDS will be in quarterly cycles so I think they’ll keep adding those in pending section and give us a form later. There is nothing wrong with your payment. I was worried about the look of it too. I hope they find a better way to show it.
ashishtilgodia02
Community Member
Why is my tax withholding cut by 5% while I have given my PAN details?
68e56446
Community Member

Try making sure your pan has the same details as provided for your profile. It might be a general issue since it's a new thing. Wait for them to solve it and don't worry if it's 5% even after change since you can claim it when filing taxes next year.

JoanneP
Moderator

Hi Sahil,

 

I'd like to follow-up on your question earlier.  Yes, you can use your legal business name on your W-8BEN Form and PAN Card. Thanks!

sukanyapandiaraj
Community Member
I think your client has not made the payment yet for last week. So you will
show only the TDS as pending in red. When the client clears the payment you
will see the invoice amount minus the TDS and service fees. Hope this helps.

68e56446
Community Member
Yes. I realized later that I had no payments done before October and the
TDS was for one being processed. So maybe the colour and look of it will
change once it's cleared and invoiced.