Indian TDS Tax Withholding on Upwork Earnings

[lenaellis]

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.

[JoanneP]

Hi Jesi,

I checked and it looks like you have already chatted with one of our agents about this. The agent has provided all the details in this ticket number: 30435179. 

[amarxcode]

I have been charged a WTH fee, I have put my PAN Card details, but still, the charge is deducted.
I was trying to withdraw funds, it threw me an error to re-enabled, I did it asked again to do it. Now again I added the bank accounts, tell me to wait for 3 days. This is kinda annoying, but before can I get the WTH fee back and refunded.

[BojanS]

Hi Amar,

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.

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.

You may check this help article for more information.

Thank you!

[vineetbegwani]

Hello Valeria,

I understand that Upwork is required to collect the withholding tax (Tax Deducted at Source) and deposit it with the Indian government. But from what I see in my tax portal, the amount of tax withheld from my earnings is not reflected. Can you please confirm the timeline by which you are required to deposit the withheld tax with the government, or please provide a statement along with the dates and amounts of the taxes are deposited with the government.

Thanks!

[kochubei_valeria]

Hi Vineet,

We are required to do our quarterly filing by 1/31/2021. Then the statements to the freelancers (Form 24Q) will be available within 15 days of that filing or 2/15/21 at the latest. 

[sunderdeepsingh]

Did they help you because they are doing the same with me? I had PAN info long time back but they silently were deducting 5% and when contacted to their Support, they had no answer and simply said they will email me.

[vineetbegwani]

Yes, they did. Actually they cannot do anything here as they are
statutorily required to withhold the tax and deposit with the government
authorities. We just need to make sure that it reflects in the income tax
portal (Form 26AS I guess).

[76282ba6]

As per the latest update from upwork, they are going to deduct TDS from freelancer's earning. and I would like to confirm under which indian TDS section, tax will be filed ? 

[VladimirG]

Hi Ketan,

I moved your post to the announcement thread so you could review previous information shared on this topic by us moderators but also by experienced users. You might also want to check articles available online, like this one for example. Thank you.

[loveleshsoni1349]

How will my tax consultant know how much TDS he should be claiming when filling for ITR?

You guys deduct TDS in Dollars ($) but you haven't revealed how much I should be claiming in INR?? How can I claim and what rate should my consultant should be using? This is very confusing really!

Example: If you have deducted TDS of $5 then then at the time of filling ITR, my tax consultant will obviously say that $5 TDS is already paid but out of my total liability I should be deducted this amount. The problem is that our currently is INR and if the TDS was also shown in INR then it would have been very easy but IT'S NOT!!

Any ideas what is the answer to this question???