Indian TDS Tax Withholding on Upwork Earnings

[lenaellis]

Starting October 1st, Upwork will begin withholding Tax Deducted at Source, TDS, from payments to freelancers and agencies located in India as part of a new tax law enforced by the Indian government.

As part of our continued efforts to remain compliant with tax laws in India, we are asking that our customers in India provide their Income Tax Identification number in the “Tax Info” section under “Settings”. For purposes of TDS withholding, the Indian government will accept either a Permanent Account Number (PAN) or an Aadhaar number. Please be sure to use the correct format for your PAN or Aadhaar number as defined by the Indian government:

• PAN is a 10-digit alphanumeric entry, i.e., A A A A A # # # # A
  # = Numeric   A = Alphabetic 

• Aadhaar is a 12-digit numeric entry

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.  Click here to Add Income Tax Identification.

To learn more about Indian TDS, click here. 

Let us know if you have any questions.

[abhimanyu-bind]

Hi,

From when I can see the credit of withholding tax deducted from my earnings in my Indian Income Tax account in form 26AS? It's not visible up to now!

[NikolaS]

Hi Abhimanyu,

I am sorry for the late response. Please be advised that we will be providing freelancers from India the appropriate forms. These will show the amount of tax withheld so you can report it on your government tax filing. We expect that the first form a freelancer will receive will be the quarterly reporting on a Form 26Q.

[iaabraham]

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Nikola S wrote:

Hi Abhimanyu,

I am sorry for the late response. Please be advised that we will be providing freelancers from India the appropriate forms. These will show the amount of tax withheld so you can report it on your government tax filing. We expect that the first form a freelancer will receive will be the quarterly reporting on a Form 26Q.

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You keep saying that you'll provide us with it, but when and where??

[g_vasilevski]

Hi Isabelle,

Thanks for your question. We've been advised that freelancers will receive their forms sometime in February. 

[iaabraham]

Thanks Goran.

[86ba95d6]

I was wondering what might happen if one does not add their aadhar card number in Upwork.

[BojanS]

Hi Arin,

Thank you for this question. The amount of tax we are required to withhold is dependent upon whether or not you have a valid PAN or Aadhaar number on file with Upwork:  

• For Upwork users that have a PAN or Aadhaar on file, we are required to withhold 0.75% of client payments to users. 

• For Upwork users that do not have a PAN or Aadhaar on file, we are required to withhold 5.0% of client payments to users.

If you do not currently have a PAN or Aadhaar number you may wish to consult with a trusted tax expert or advisor. Upwork cannot provide specific tax advice.

[VladimirG]

Hi all,

We apologize for the confusion regarding our previous communication wherein we advised about the quarterly forms of tax deducted at source ("TDS") that we'll be providing to you. To clarify the reporting process, Upwork is required to submit a quarterly report of TDS to the Indian Government for the relevant three-month period. Indian Freelancers can access the information related to taxes deducted at source by Upwork, in their Form 26AS on the Indian income-tax website (e-Filing Home Page, Income Tax Department, Government of India (incometaxindiaefiling.gov.in). This form can be used by Indian Freelancers for claiming credit of TDS in their income tax return for the relevant year.

Additionally, we would like to inform you that a certificate of TDS (form 16A) is required to be issued quarterly from Upwork to the Indian Freelancers. These certificates will be sent via email and we are making every effort to deliver these certificates by the due date of February 15, 2021.

[arulprasadj]

Upwork has started Withholding Tax or TDS for Indian Freelancers from October 2020. I want to download the TDS or WHT report. How can I download the TDS or WHT report of my account?

[arulprasadj]

How can I download the TDS or WHT report of my account?