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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
shyamthaker
Community Member

Hi,

 

I have freelaner account in upwork and I withdraw funds to my company's bank account.

 

So to get the credit/regund of TDS, Should I add my company's PAN number or my pesonal PAN number? 

 

Please advise.

 

Thanks

VladimirG
Community Manager

Hi Shyam,

 

Since we cannot offer specific tax advice, you may wish to consult with a trusted tax expert or advisor.

shyamthaker
Community Member

Thanks for revert.

 

I have already taken advise from tax expert, he saiys to get credit I have to add company's PAN number because I receives payment to company's account.

My question is UpWork allows me to add my company PAN number in my profile tax settings?

 

Thanks

VladimirG
Community Manager

Hi Shyam,

If you've managed to add either your PAN or Aadhaar number successfully, i.e. it was accepted and you didn't get an error message, you're good to go. If a freelancer is working on a contract under an Agency, the payments go to the Agency's account. So the tax will be withheld on those payments and remitted in the name (and using the PAN) of the Agency.

cyberimpulse
Community Member

hello Joanne Marie P 

the problem is  one of employer pay  me and my pan is not added in my agency profile that time , pan is updated in my presonal profile , later on i also added in my compnay account but before that upwork charge  me 100 usd as tds so is that tds i will get refund so instead  of 5% am i get charge 0.75 or looking forward for your guidence how to get deducted money back thanks 

VladimirG
Community Manager

Hi Dheeraj,

Thanks for the question. Please note that we can't offer specific tax advice and suggest you reach out to a trusted tax expert or advisor. Since the transaction in question appears to had happened before PAN number was added to your account, a 5% rate has been applied. We are required to forward any tax we collect from our users to the Indian government. Going forward you should see the tax being withheld at 0.75% rate.

kochubei_valeria
Community Member

Hi Sukanya,

 

The Government of India requires Upwork to deduct income-tax from the gross amount which includes service fees. That being said, since payments for Upwork's services are not subject to Indian withholding tax because Upwork's services are performed outside of India, you can deduct these expenses when filing your taxes. When filing a tax return with India, freelancers should report the Gross payment from their client as income, and then claim the services fees paid to Upwork as a deduction. Upwork, itself, pays taxes to the Indian Government on the services fees, remitting a 2% tax directly to the Indian government (under the recently enacted Equalisation Levy).

sukanyapandiaraj
Community Member
Got it. Thank you Valeria for your explanation.

- Sukanya
bachhav-kiran
Community Member

Please tell me any one why upwork start charge WHT fees

 

**Edited for community guidelines**

petra_r
Community Member

Kiran B wrote:
Please tell me any one why upwork start charge WHT fees

Because you haven't given them the correct and complete tax details? Read more about it here