I checked and the withholdings are 0.75%, not 5%.
In general, TDS will apply to all client payments sent to Indian freelancers and agencies, with the amount of TDS to be collected determined by whether or not you have provided a PAN or Aadhaar number to Upwork.
You can check this help article for more information.
Kartik J wrote:
Can I change my PAN number on Upwork.
How will it impact my TDS (WHT) , Form 16A and 26AS.
Zahir A wrote:
Can I change my PAN number on Upwork? I need to enter aadhaar number
How will it impact my TDS (WHT)
Hi Kartik and Zahir,
We apologize about the delay in providing the information you requested. Note that we rely on the good faith of the users to provide the correct PAN. The PAN should be the account owner’s number, as that is the person that is earning income and may have an Indian tax reporting responsibility.
If you provided a PAN previously and we used that information to record transactions, we have started reporting to the government under that PAN. If you change the PAN now, we will use the new PAN number for all future transactions. The transactions that have occurred to date will be reported under the PAN that was on the account at the time.
Hi, may I know why I'm being taxed for the amount that I have in upwork? I earn less than the taxation amount per financial year, then why I'm being taxed? I understand and I have read that article mentioned by upwork. My question is why I'm taxed by upwork? If I earn above the taxation limit, then I'm going to pay the tax to the government of India. Why upwork need to deduct money is my question? Form 16A is for people who earn more than 4 lakh per year (I suppose). I also need to know the law/act number which says upwork to deduct tax from freelancers as this Indian Tax Deducted at Source (TDS) or Withholding Tax is provided in upwork website than in Indian government website. I want the TDS page from the government stating upwork website to collect tax from freelancers. Will upwork provide me that? Guys what's your opinion? Is upwork cheating us in the name of tax? How they pay the tax to the government if they deduct money?
I think you have misunderstood the point of TCS. Upwork isn't taxing you. They are just collecting a set per cent of your income to submit to the government. Even if your income falls below the threshold, these need to be paid.
As for proof of payment, that's where Form 16A comes into play. It is linked to your Pan/Aadhar and the amount collected by Upwork shows on the form and that can be used as a rebate if your tax liabilities are lesser than what the TCS amount was.
I suggest you read more about how taxation works in our system and get a better understanding of the Rebate system.