Hi Nisha, Amit, Bibhas and Harsh,
Thanks for your questions. If a Freelancer is working on a contract under an Agency, the payments go to the Agency's account. So the tax will be withheld on that payment, and remitted in the name (and using the PAN) of the Agency.
If I am working under agency, do I need to provide my personal PAN and Aadhar details instead of the company's details? (As per the new rules of Upwork for Indian freelancers and companies)
I'd like to share the information that Lena noted on the announcement she posted here.
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.
Thanks for reposting this!
Seems like we will get TDS certificate from upwork every month and we can claim Tax credit/refund if they cut extra from Indian Gov. Make sense?
We've been advised that the reporting is done quarterly. So a statement will be provided to the freelancer every three months with the details of the tax withheld on their behalf.
hello Joanne Marie P
the problem is one of employer pay me and my pan is not added in my agency profile that time , pan is updated in my presonal profile , later on i also added in my compnay account but before that upwork charge me 100 usd as tds so is that tds i will get refund so instead of 5% am i get charge 0.75 or looking forward for your guidence how to get deducted money back thanks
Thanks for the question. Please note that we can't offer specific tax advice and suggest you reach out to a trusted tax expert or advisor. Since the transaction in question appears to had happened before PAN number was added to your account, a 5% rate has been applied. We are required to forward any tax we collect from our users to the Indian government. Going forward you should see the tax being withheld at 0.75% rate.
Nitin in my opinion you are right. The TDS should not be applicable for freelancers. We are earning forign exchanges. The new tax rule is applicable for transations where one pays to foriegn e-commerce companies in Indian rupee which is converted to foreign currency. This is applicable for any purchases eg from amazon.us or google us and similar.
Upwork needs to look into it in more detail and take more consultation.
Here is more details from bloomberg https://prnt.sc/uhu8o7