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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
g_vasilevski
Retired Team Member

Hi Keval,

 

I would like to clarify that we cannot refund the charges prior to adding PAN. 1% charge will only be applied after you have added your PAN. For the 5% charges, I would recommend reaching out to a local expert that can advise you accordingly on how you claim them back. Thank you.

karmicdice
Community Member

Thank you Goran.

I just got off the call with my accountant, he said that I will need a reference of some kind - preferrably tds certificate so that gov can map who has tax withheld.

g_vasilevski
Retired Team Member

Hi Keval,

 

You can download your invoice at any time by going to Reports > Transaction > click on the Ref ID > View Invoice. Thank you.

husain215253
Community Member

Hi Goran,

I have not got the email for Form 16A for the period January–March 2021.
Can you please let me know how to get it?

AleksandarD
Community Manager

Hi Husain,

 

Rest assured, we will issue Form 16A to you. However, delays have occurred due to unclear filing instructions and limited guidance from our accounting partners in India. We know this information is critical to you and we are sorry for the delay. We will update you via email as soon as we know more. Please know that all funds withheld have been remitted to the Indian government; the delay has been in the reporting and allocation of those funds on an individual-user basis.

 

Thank you.

vdsramguptakandu
Community Member

Hi Team,

 

I still did not see any deposit of TDS in my Traces for last quater. Will it take more time to resolve the issue ?

 

Thanks,

 

aradhanadalai
Community Member

Will Upwork provide Form 16 for Indian Tax filing? If yes, how do you get it?

AleksandarD
Community Manager

Hi Aradhana,

 

Rest assured, we will issue Form 16A to you. However, delays have occurred due to unclear filing instructions and limited guidance from our accounting partners in India. We know this information is critical to you and we are sorry for the delay. We will update you via email as soon as we know more. Please know that all funds withheld have been remitted to the Indian government; the delay has been in the reporting and allocation of those funds on an individual-user basis.

 

Thank you.

stark3196
Community Member

My TDS details for Quarter October–December 2020 have not been reflected in my Form 16A yet. As I received an email on 13th March from Upwork that it will be done around April month. Also, can you please let me know when will TDS details for Quarter January–March 2021 be reflected in Form 16A?

 

I can understand that this is the first time Upwork is handling TDS so it got delayed. I just wanted to know the status.

 

Thanks in advance for your help.

AndreaG
Moderator

Hi Vivek,

 

We had hoped to have the tax information available by the expected date, but delays have occurred due to unclear filing instructions and limited guidance from our accounting partners in India. We know this information is critical to you and we are sorry for the delay. We will update you via email as soon as we know more. Please know that all funds withheld have been remitted to the Indian government; the delay has been in the reporting and allocation of those funds on an individual-user basis. We should have this matter resolved before the end of the Indian tax year, so you should not incur any penalties from the delayed issuance of the form 16As.