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Indian TDS Tax Withholding on Upwork Earnings

76681f54
Active Member
Kartik J Member Since: Jan 17, 2020
271 of 280
Hello
Can I change my PAN number on Upwork.
How will it impact my TDS (WHT) , Form 16A and 26AS.



vladag
Community Manager
Vladimir G Community Manager Member Since: Oct 31, 2014
272 of 280

 Kartik J wrote:
Hello
Can I change my PAN number on Upwork.
How will it impact my TDS (WHT) , Form 16A and 26AS.

Zahir A wrote:

Hello
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.

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zahirupwork1
Active Member
Zahir A Member Since: Nov 15, 2020
273 of 280

Hello
Can I change my PAN number on Upwork? I need to enter aadhaar number
How will it impact my TDS (WHT)

pradheesh23
Active Member
PRAVEEN P P Member Since: Dec 8, 2020
274 of 280

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? 

pramanik-riju
Active Member
Riju P Member Since: Aug 23, 2019
275 of 280

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.

vladag
Community Manager
Vladimir G Community Manager Member Since: Oct 31, 2014
276 of 280

Hi Praveen,


Thanks for your question. Tax Deducted at Source (TDS) is a means of collecting income tax in India by requiring businesses making payments in India to remit a portion of that payment directly to the Indian government. A law adopted in March 2020 requires foreign e-commerce operators, like Upwork, to begin collecting TDS on payments to service providers in India starting October 1, 2020. The amount of tax withheld is matched to the service provider by using their Permanent Account Number (PAN) or the Aadhaar number. 

To avoid payment and collection difficulties as well as exposures to penalties and interest, Upwork has been advised to withhold tax on all payments to users. You will be able to claim a tax credit or refund from the Indian government should you pay more taxes than required. Since we cannot offer specific tax advice, we suggest you reach out to a trusted tax expert or advisor to learn more about Indian TDS and your tax obligations. 

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suganthanth
Active Member
Suganthan T Member Since: Apr 2, 2021
277 of 280

Hi All, how to deduct TDS on payments to Non-Resident freelancers by an indian resident. Since the payment is through Gateway, i am not able to deduct any tax. Kindly elabrate me the income tax provisions and procedure to deduct tax.

egaruth
Moderator
Nikola S Moderator Member Since: Jul 2, 2020
278 of 280

Hi Suganthan,

 

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.

 

  • A 0.75% 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.

 

Edited to NOTE: The withholding rate of 0.75% is effective from October 1, 2020, until March 31, 2021, and was increased to 1% effective April 1, 2021.

 

You will need to add a PAN or Aadhaar number in order to keep the withholding tax at 0.75% of your earnings, should we need to collect the tax. To enter your PAN or Aadhaar number, click here.

 

You can find more information about Indian Tax Deducted at Source in this help article

 

~ Nikola

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vikram-malik
Active Member
Vikram M Member Since: Aug 23, 2017
279 of 280

Hello Nikola,

 

Unfortunately, what you are saying is not proving to be accurate.

 

Specifically, the "Withholding Tax" for me is turning out to be 1% instead of 0.75%, despite having provided accurate Aadhaar/PAN details.

 

As an example, please refer to the latest payment I've received ($50) which is still in "Pending" status (I am assuming you DO have access to the records). 0.75% of that would be $0.38 while I am being charged $0.50. The same holds true for some other, recent transactions as well.

 

The difference may be marginal but it all adds up.

 

Moreover, as others have repeatedly pointed out, "Withholding Tax" should be charged on the net receivable amount and not the gross one. So, in the abovementioned instance, it should be charged on $40, after Upwork's $10 fee, in which case the "Withholding Tax" would be $0.30.

 

I would request you to please look into this and respond suitably at the earliest.

 

Thank you! 

kochubei_valeria
Community Manager
Valeria K Community Manager Member Since: Mar 6, 2014
280 of 280

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.

~ Valeria
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