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.

[kochubei_valeria]

Hi Vikram,

Please, note that the withholding rate of 0.75% was effective from October 1, 2020, until March 31, 2021, and was increased to 1% effective April 1, 2021.

[work_connect]

Hi Valeria,

As per your explanation, whatever Upwork charges as Service fee from freelancers, Upwork is paying 2% tax to the Indian Govt. Can we get a statement as to how much tax Upwork has paid for service fee earned from individual freelancer and where can we see this in our Upwork account.

[mobilyzz-sanjay]

Hello Everyone,

I have been filing my returns using ITR-4 (self-assessed). I have heard that Upwork has started providing Form-16 to Indian Freelancers (is this information correct?). If this information is true, can we go ahead with ITR-1?

Thanks.

[JoanneP]

Hi Aniruddh,

You will be able to download a Form 26AS from TRACES this month, after the Indian tax year closes. This form can be used to file your annual taxes. Going forward, you can also visit TRACES to see your year-to-date tax info. Additionally, we will issue a Form 16A to you each quarter.

[sridhar_orion]

Joanne,

Is Upwork yet to provide the form16A for the last and previous quaters? I'm yet to receive the form16A

[ninad_kal]

I live in India. My income from Upwork is less than 2.5 lakhs. Did I need to register some were or pay the tax?

[PradeepH]

Hello Ninad,

Laws vary greatly from country to country. We always advise checking with your Tax advisor or an accountant or government website on your country's tax laws. Upwork will deduct TDS for your earnings on our platform which is determined by whether or not you have provided a PAN or Aadhaar number to us.

• A 1% tax is withheld from earnings for freelancers that provide a PAN or Aadhaar number to Upwork.
• A 5% tax is withheld from earnings for freelancers that have not provided a PAN or Aadhaar.

You will need to add a PAN or Aadhaar number in order to keep the withholding tax at 1% of your earnings. To enter your PAN or Aadhaar number, click here. You can refer to this Help page for more information.

Thank you

Pradeep H.

[galaxysoftware]

Well they are still going to charge TDS on your earnings, so provide them your PAN/Aadhar otherwise you will get charged 5%

And yes you will have to file ITR to claim the TDS you paid, I think they will issue a refund if your overall imcome including upwork is below 5 lakh!

this is just my opinion, you still have to consult a CA with appropriat details.

[786khan]

Hi, 

I have already linked my PAN. But seems upwork taking 2 times WHT fee in evey week, It's too much. I am very disappointed with upwork. Why do they take too many charges? If anything is wrong with my PAN number they should inform me so that i could fix it, it's not a right way to charge for it. It seems Upwork wants,  all freelancers should give their all earnings to them.
Please help me to make a 1% WHT fee on each payment instead of 5%.

**Edited for Community Guidelines**

Today is 4/20/21 why they are taking fees in advance(4/28/2021). It should be taken on next billing

Thanks!

**Edited for Community Guidelines**

[g_vasilevski]

Hi Malik,

I would like to clarify that 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 1% 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.

I can see that you have added your PAN number and that you were charged 1% on your new earnings. I would also like to clarify that once your client is billed, you will be charged with the tax as well. To view more details about this, go to Reports > Transaction History.