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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
balvant8127
Community Member

Upwork service fee must be reduced to 10% instead of 20%. And For connect price should be decreased as well.

 

Upwork have 50% indians and now if you are also start deducting tax i can say upwork will loose many freelancers. and it will affect on your revenue.

 

 

pkshah22
Community Member

It's already 3 months after which upwork started collecting "WHT". So can anyone tell me how to get the quaterly report ?

JoanneP
Moderator

Hi Pratik,

 

Please be advised that we will be providing freelancers from India the appropriate forms. These will show the amount of tax withheld so you can report it on your government tax filing. We expect that the first form a freelancer will receive will be the quarterly reporting on a Form 24Q.

bioguy_tv
Community Member

Upwork has started deducting tax at source for my account from October 2020.

 

Where can I get the TDS cerrtificate / Form-16? - I hope all Indian freelancers will be receiving the certificate.

qaidjohar1200
Community Member

Hello, I am an Indian freelancer.  As Upwork introduced withholding tax in FY2020-21, the TAN number will be required for us to declare the withholding tax when filing the ITR in AY2021-22.

JoanneP
Moderator

Hi Qaidjohar, 

 

You may enter your PAN or Aadhaar number in the “Tax Info” section under “Settings.”  Upon checking, it looks like you have already added this information in our settings. 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! No further action on the Upwork platform is necessary. 

 

Please be advised that we will be providing freelancers from India with the appropriate forms. These will show the amount of tax withheld so you can report it on your government tax filing. We expect that the first form a freelancer will receive will be the quarterly reporting on a Form 24Q.

009ankit
Community Member

Form 24Q is for "salary", while we work as independent contractors. I'm not sure how that is going to work out legally. Plus, the 26AS should have been updated for the quarter that just ended on the 31st of December but there is no proof of the tax deducted in the government portal as yet. Unless Upwork (the deductor) updates the form 26AS with the amount that it debited as tax, we cannot claim the tax credit for the same. Please resolve this. 

lubna04
Community Member

Hello Joanne,

From where will we have access to Form 24Q? The last date to file Tax for last quater ends this month. How will I file for the return if you have not provided Form16 or your TAN number

JoanneP
Moderator

Hi Lubna and Ankit,

 

I've requested the help of our team. One of our team members will reach out and assist you directly via a support ticket

bineeshk
Community Member

This withholding tax will be refunded to our account? in future?