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.

[AveryO]

Hi Artiben, 

I can assure you that this is not the case. We are working with Indian tax authorities to get more information regarding this. 

Our team is staying on top of this concern, and once we have the correct information, we will update the Community. 

[pradheep99]

Can you give us an insight on when will you forward this tax money to our Government? I don't see them right now after 5 full months. 

[keyur2020]

Upwork team, You are taking time to set up the process and that is fine but you should also consider the due dates in correspondence of the new compliances you are supposed to follow. 

if you do not have operations active to get this resolved, you can calculate based on your data that how many Indian agencies and freelancers as being service provider has to suffer heavy penalties and non-compliance labels from Govt Authorities in different branches of taxation.

Initially, Upwork LLC gave the date of 15th Jan and pushed it to 15th Feb to NO ANSWER ZONE.

Your subjective replies to our issues are making all of us feel uncomfortable working on this platform to face such legal issues. If we do not get payment from a client for time being, that can be managed but you guys should understand the impact of delay in this new process and being at a blind spot, you should also have some concurrent bases to share with the community.

Kind request to consider this ON PRIORITY and share some specific insights to allow us plan better.

[jkpaul20]

Hi Valeria,
When would Upwork deposit the Tax Collected from freelancers to Income Tax Authority. I do not see the tax collected (0.75%) were deposited against my PAN as on 02/28/2021 and normally it is being deposited every quarter. 

Kindly advise.

[jkpaul20]

Yes, it has not been deposited to Income tax Authority as on 02/28/2021 and TDSs are being deposited to the authority every quarter. So october quarter ended on 31st December, and TDS collected are deposited before 31st Jan.

So why was this not deposited as yet. or when will this be deposited.

[galaxysoftware]

Guys, TDS means "Tax Deducted at Source", Upwork here is the source for all work we do on the plateform so as GOI mandate they must withhold whatever percentage Govt. decides and follow procedures so it gets reflected on our accounts!

I just hope they are not having any troubles with IT department, as they mostly collect in USD so how is it going to reflect in ones account and what currency conversation rates will apply and whatnot, if I understand it right!!

Hope this gets done quickly, we all are in edge right now!

[sukhjindersi]

The TDS deducted by UpWork has not been deposited to Income tax Authority as on 03/03/2021 and but it is being said by UpWork that TDSs are being deposited to the authority every quarter. So October quarter has ended on 31st December, and TDS collected are deposited before 31st Jan.

So why was this not deposited as yet. or when will this be deposited.

Secondly it was being said by UpWork Moderator Bojan S that "We've been advised that the reporting is done quarterly. So a statement will be provided to you every three months.". 

Quaterly statement also not available as of now. When this will be available?

[utkarshmaitin10]

Hi Upwork,

Well i checked , I am unable to see the Tax deducted in my Form 26AS.

Thanks, please check and let us know

[vipunit]

I have asked @UPWORK for the TDS certificates, as per Indian IT norms, TDS deducted should be deposited to IT department quarterly, but its been almost a year and there is no Tax credit in Traces. Moreover we can't add it manually as applicable forex would be different and income earned would be diff, so it kind of tricky situation here.

[vipunit]

Hello Lovelesh,

TDS deducted should be remitted quarterly, but it not followed by UPWORK so far. i believe that there is way to wait for the end of march. When tds remitted will be reflected in TRACES in ITR portal in INR, then you can file your return, moreover you need to consider UPwork fee as expense thereby you need to pay taxes only on INR credited in you inidan bank account.