Indian TDS Tax Withholding on Upwork Earnings

lenaellis
Moderator

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.



 

453 Comments
anas0696
Active Member

New rule of withholding TDS for indians is going to start from Oct.1.

So now freelancer earning will be like 20% upwork commission, 0.75% TDS, $1.5/10 connects, $0.99 per withdrawal to local bank, this is so ufair upwork should reduce the commission fee they have imposed, or should provide free monthly connects.

abinadab-agbo
Community Guru

The dead hand of the tax man.

pathakharsh78
Active Member

Take everything whatever we are earning... Smiley Sad

20% Fees!

Paid Connects to send Proposals!

Withdrawal Fees!

and now TDS withholds!

 

Seems like in near future only paid membership to create an account on Upwork!!

 

nishamoon
Frequent Visitor

Hi,

 

I do all my work exclusively through an Agency in Upwork and all payments go to the Agency. Would the withholding tax apply to me or the Agency?

 

Regards

amitdmsp
Frequent Visitor

If I am working under agency, do I need to provide my personal PAN and Aadhar details instead of the company's details? (As per the new rules of Upwork for Indian freelancers and companies)

tinker_bell3
Moderator

Hi Amit,

 

I'd like to share the information that Lena noted on the announcement she posted here.

 

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.

disha_india
Active Member

I have the same question. All Agency payments are going to Agency account, so is it require to add PAN for individual Freelancer?
Please let me know.
Thanks,
Regards

pathakharsh78
Active Member

I think Agency as your account will be connected with your Agency account and payment withdrawal happen through your agency account so. 

iaabraham
Community Guru

Abinadab A wrote:

The dead hand of the tax man.


Yeah. This plus the 10%-20% fees, fees for membership, withdrawals, etc. It's just charges on top of more charges.

nitinsharma91
Ace Contributor
  1. Why can't Upwork pay this within the big fat 20% or 10% they are earning from us?
  2. Is there any clarification on how the Upwork earnings come under foreign e-commerce operators? I mean it makes sense for purchasing connects, purchasing membership etc. How exactly is working for a client an e-commerce transaction?