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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
BojanS
Community Manager

Hi Sandeep,

 

Please note that withholding tax doesn't update retrospectively. It'll apply to transactions going forward after you add the PAN number. You can check this help article for more information.

 

Thank you!

gsmehra61
Community Member

Hi, I know upwork deducts extra $ if we don't add our Pan card or Adhaar card.

But I have added this from starting. But today I'm seeing upwork still deducts WHT fee from my earnings.

Any way to fix this? Or Should I start assuming that upwork now started charging more?

**Edited for Community Guidelines**

g_vasilevski
Retired Team Member

Hi Gagandeep,

 

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.

Thank you.

gsmehra61
Community Member
Oh Thank you Goran for clarification.

Upwork already charges 20% now another 0.75%

Still, it's OK as I love and respect this platform it gives me so much great work and valued clients.

Happy Bidding and thank you again.
68e56446
Community Member
You will have 0.75% TDS withheld if you have added PAN or Adhaar. It's
government of India rules not UpWork and they get these taxes. If you don't
add, it will be 5%.
68e56446
Community Member
It's Ankit here. Anyway UpWork shold reduce fees after 50 or 100 dollars in
my opinion. The taxes and international transaction duties are a mess that
I don't even under yet. Fear of IT or ED knocking on Freelancers' doors
seems too real when you see the unknown requirements for DBT.
sukanyapandiaraj
Community Member
Hi,
Can you please find out why, as you mentioned in your reply, Upwork chooses to calculate WHT on the invoice amount and not the actual income? Do you think this is the right way to do it? I am not sure what tax experts would have advised Upwork on this. Please explain, as this is not right and contrary to what is explained in the Help page that moderators are frequently quoting in their replies.

Thank you.
mindhunteroo7
Community Member

Seems, Now Freelancers are buried under Upwork fees, Connect fee, Direct Contract fee, and Now TDS.  I am paying taxes every year on time. I mentioned my whole income there. Don't know why the TDS comes now?

After TDS, we have to ready for TDS fees from 0.75% to 1% from 1 April 2021 and this will continue increasing.

Details Here - Upwork Membrship - $14.99, Direct Contract fee 3.4%, TDS - 0.75%, Transfer to Bank fees - $0.99

 

One more, Upwork never gives the current currency exchange rate. Now in stocks, the price of $1USD is - ₹73.3800/73.4327

But when I tried to transfer money to my bank account, Upwork show - 71.7400 USD/INR

 

We are paying taxes, transition fees, TDS. Please let me know, why you are not giving the full value of USD to INR?

 

Regards,

Nirmal Singh

rajesh_mehta
Community Member

Hello

 

Indian GST law says in case you are provding export of services and your export receipts are below 1 Core, you need not to pay GST on export of services. You have to submit letter of undertaking online at GST website.

 

Upwork has started taking GST number from agencies doing work from india at upwork. Though it seems optional primafacie and upwork has provided this for future set up of  upwork permanent office in india.

 

Could you all give more light on the subject on this community so that more clarity on upwork stand with resepct to LUT with respect to small agecies working on upwork.

 

Rajesh.

 

 

 

 

 

 

VladimirG
Community Manager

Hi Rajesh,

 

Thanks for your question. Could you please clarify if you're referring to the GST or TDS charge? Also, could you please provide more information about the specific agency-related scenario you're asking about, so we could advise you in more detail?