Indian TDS Tax Withholding on Upwork Earnings

[Pankaj R]

Did you get any TDS ID verification success confirmation notification on Upwork or in your mail ID?

[Vladimir G]

Hi Pankaj and Rahul,

If you've managed to add either your PAN or Aadhaar number successfully, i.e. it was accepted and you didn't get an error message, you're good to go. We don't display nor send a notification when tax info details are added. No further action on the Upwork platform is necessary and any validation needs to be done by the account owner.

[Rahul B]

But I still see notification from Upwork where it's saying it will hold 5% if we have not given tax ID.

[Anshu G]

I would like to get some information and clarity on upwork’s new process of “Income Tax Identification”.

If I’m working under an Indian Agency and my profile is with my name & details under an Agency, and all payments are made from Manager ID(for buying connects,etc.), then do I need to share my own PAN/Aadhar details or can we share Agency Pan/Aadhar details(Manager details under which are all other ID’s) for Income Tax Identification Process.

[Bojan S]

Hi Anshu,

I've merged your post with this thread where the same question was already addressed. Please check Vladimir's response above and feel free to reach back to us if you have any additional questions.

Thank you!

[Sanjay S]

Thank you for your update oN TDS deduction on payments made by Upwork. I have a few queires:

1. TDS will be deducted on complete amount including Upwork fees/commission?

2. It will be deducted and dposited when?
   -on withdrawal OR

   -on each payment recd. in our Upwork account OR

   - every month end

   - or any other way

3. Does Upwork has Indian PAN (Permanent Account Number) ? ,if yes, please provide the same for our records.

4. Does Upwork has any office or address in India now?

Your answers will be appreciated.

Thanks

Sanjay 

[Vladimir G]

Hi Sanjay, thanks for the questions!

1. 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.

2. Upwork will withhold tax on all payments made on or after October 1, 2020. The law requires withholding based on the date of payments made. 

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.

3. & 4. No on both of these questions. 

[Sanjay S]

Thank you for your response.

Does this also means that agency will have to pay Tax (TDS) on the
commission/fees charged by upwork and deposit to the government in addition
to the TDS deducted by Upwork as the commision forms the part of our gross
income and then deducted by upwork.

As Upwork does not have Indian PAN number the TDS on commission paid by
agency will be at the highest rate @20% and to be paid by agency from his
pocket. This will be an additional cost

Please advise.

[Amit D]

We are an agency and we have 10+ members working under agency, Do I need to provide the agency's PAN/Adhar details only or every member's PAN/Adhar details?

[Vladimir G]

Hi Amit and Sanjay,

Thanks for your questions. To clarify the process, 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.

To Amit's question, only one PAN/Aadhaar can be added.

Sanjay, please note that payments for Upwork's services are not subject to Indian withholding tax because Upwork's services are performed outside of India, and thus fall under rules in the US-India tax treaty. The treaty relieves the freelancers of any withholding obligation, and instead, Upwork is required to calculate tax on these services and remit directly to the Indian government (under the recently enacted Equalisation Levy).