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Indian TDS Tax Withholding on Upwork Earnings

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Ace Contributor
Nitin Kumar S Member Since: Jun 9, 2014
41 of 121

Prachi T wrote:

Nitin Kumar S wrote:


However in the long run, I wish Upwork can put efforts (consult with tax experts to find a solution where you deduct TDS as per the exemptions provided in the law). 


This cannot happen. There is no way Upwork can figure out what a freelancer's total annual earnings are. Upwork is not the sole source of income for many freelancers.

 

The only solution here is to file for tax returns if your total annual income exempts you from paying income tax. 


Then why would the government add this clause?  No deduction under sub-section (1) shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of an e-commerce participant, being an individual or Hindu undivided family, where the gross amount of such sale or services or both during the previous year does not exceed five lakh rupees and such e-commerce participant has furnished his Permanent Account Number or Aadhaar number to the e-commerce operator.

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Community Guru
Abinadab A Member Since: Sep 26, 2016
42 of 121
Prachi is correct, and the clauses you keep quoting only serve to buttress her point.
Upwork cannot know the gross sales of the ecommerce participant (you), because many freelancers also do business outside of UW.
The Indian tax authority shall therefore, refund any taxes that may have been deducted, if they find the ecommerce participant did not hit the minimum threshold. Once such refund is applied, it would have the same effect of no deduction having been made.
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Community Guru
Prachi T Member Since: Nov 4, 2017
43 of 121

Tax Deduction at Source is very common outside Upwork, too. Most companies that hire contractors, deduct tax at source and provide the tax certificate. This is one way the government reduces the chances of tax evasion.

 

I don't see this as a problem. It's only 0.75%. That is probably much less than the actual IT most freelancers would pay once they declare their annual earnings.

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Ace Contributor
Nitin Kumar S Member Since: Jun 9, 2014
44 of 121

Prachi T wrote:

Tax Deduction at Source is very common outside Upwork, too. Most companies that hire contractors, deduct tax at source and provide the tax certificate. This is one way the government reduces the chances of tax evasion.

 

I don't see this as a problem. It's only 0.75%. That is probably much less than the actual IT most freelancers would pay once they declare their annual earnings.


Yep filing ITR or TDS deduction is not a problem at all. Vladimir has answered the specific questions I had on the incoming changes on Upwork.

 

My only followup to you was why do you think there is a clause which you suggest can't be implemented at all in reality

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Active Member
Aman A Member Since: Feb 12, 2018
45 of 121

Hey,

 

I just want to ask can we withdraw payments in my HUF account?

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Moderator
Aleksandar D Moderator Member Since: Mar 23, 2019
46 of 121

Hi Aman,

 

You should be able to withdraw funds, but please note that the listed name on the account must match your verified name on Upwork. You can check out this help article for more information.

 

Thank you.

~ Aleksandar
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Active Member
Aman A Member Since: Feb 12, 2018
47 of 121

Dear Aleksandar D,

 

I hope do you understand by HUF account?

 

**Edited for community guidelines*

 

Can you please refer above link and help me that I can use a HUF account with upwork or not?

 

Thanks,

Aman

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Moderator
Bojan S Moderator Member Since: Mar 9, 2018
48 of 121

Hi Aman,

 

I checked this and see that you've posted this question on your existing ticket with our team. Please allow time for our team to respond and update the ticket with the information you're looking for. If you have any additional questions please post them on that ticket for further assistance.

 

Thank you for your patience!


~ Bojan
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Active Member
Ashutosh N Member Since: Jun 15, 2020
49 of 121

Would this 0.75% withholding tax  be charged at the time of withdrawals or would this be charged on every invoice ? 

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Moderator
Joanne Marie P Moderator Member Since: Nov 26, 2017
50 of 121

Hi Ashutosh,

 

For Upwork users that have a PAN or Aadhaar on file, we are required to withhold 0.75% of client payments to users. The withholding tax is calculated based on the gross amount that the user invoices their client, so it is calculated prior to freelancer service fees or any other fees that may reduce the amount credited to the user’s account.


-Joanne
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