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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
vipunit
Community Member
Hi, thank you for your message, my tds is updated now, till march 2021
sukhjindersi
Community Member

@UpWork still there is no news. I'm not seeing under the TRACES any information about UpWork Tax Deduction. I'm sure everyone in India facing same thing. Additionally there is no grevience cell at your end which let us know what to do or where to go?

 

I request you to take CRITICAL steps in this regard, we are near to filing our returns and if this will not reflect in TRACES, it will be HUGE blunder of which we freelancers are NOT responsible but only YOU. 

sukhjindersi
Community Member

I think only way is to Trend a #hastag on Twitter about this issue, might be this will open up there eyes.

javedkalaniya
Community Member

I could not see any Tax credit information for my account on traces. can I know when can I see that?

Since Oct-2020 Upwork deduct TDS from our earning, but I could not see any TDS information yet. I already set the tax information in my account. Please let me know when can I see the forms 26AS or Forms 26Q.

 

Thanks

vipunit
Community Member

You can contact upwork support for tds certificate or tax credit. Beyter if
u can check traces in income tax filing site **Edited for Community Guidelines**  

indylogix
Community Member

Dear team,

 

Today I got one payment from a new client in Upwork. When I saw the report, it deducted 5% fees as WHT. While I studied the terms again, I found that it is deducted as a withhold tax. I added the PAN number now so will this 5% deduction credited under my PAN card? Also now onwards it would deduct 1% fees only?

 

Please help!!!

g_vasilevski
Retired Team Member

Hi Maulik,

 

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.

Since you've already added your Pan, the fee on your future earnings that will be held will be 1%. Thank you.

indylogix
Community Member

Hi Goran,

 

Thanks for assuring that. However, what will happen to 5% deduction which is already made in my account? Will that be updated in my tax credit to claim back?

g_vasilevski
Retired Team Member

Hi Maulik,

 

You will not receive a refund for the tax charge that was already done. I would recommend to reach out to a local expert that can guide you further about this. Thank you.

karmicdice
Community Member

Hey guys,

 

So I went through this link : https://support.upwork.com/hc/en-us/articles/360044709894-Indian-Tax-Deducted-at-Source-TDS-or-Withh...

 

5% of the tax was withheld with Upwork in compliance with the Indian government, which is understandable. However, after I updated my PAN details, it started withholding 1%.

 

In the article it says : 

"Form 16A for January–March 2021 –– It should arrive on schedule in May and you should be able to view details in TRACES in June."

TRACES is linked with Aadhar and PAN. What happens to the 5% which were withheld before I updated my PAN details?

 

Is there a way where Upwork can give some details so that I can claim my tax rebate from the government?

 

In India, companies that deduct tax at source may choose to give, what we call it as, a "TDS certificate".

 

Any ideas?