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.



 

452 Comments
rohit_db
Frequent Visitor
I am an Indian freelancer. From last October upwork is deducting WHT. But I updated Adhaar instead of PAN. So the TDS is not showing on TRACES.
What do to now?
kochubei_valeria
Community Manager

Hi Rohit,

 

If you previously provided your Aadhaar number to Upwork, your transactions could not be reported to the Indian tax authorities. We highly recommend that you provide your PAN under Settings> Tax Information in your account so that we can submit your transactions to tax authorities. We will submit one-time corrections to the Income Tax Department in early September. Please make sure to follow the steps from the recent email you've received about it from Upwork in order to ensure you've completed your tax information correctly.

rohit_db
Frequent Visitor
Thank you Valeria!!
priyankrawat
Active Member
Hi, I've updated my PAN number instead of my AADHAAR number. Now all WHT records will be updated in traces? Also you mentioned that we are supposed to add our PAN and not AADHAAR, so why other moderators are saying that AADHAAR number is also fine?
vladag
Community Manager

Hi Priyank,


Priyank R wrote:
I've updated my PAN number instead of my AADHAAR number. Now all WHT records will be updated in traces?

Thank you for updating your tax information. We will submit one-time corrections to the Income Tax Department in early September.

Also you mentioned that we are supposed to add our PAN and not AADHAAR, so why other moderators are saying that AADHAAR number is also fine?

Regarding the PAN vs Aadhaar question, here's the clarification we shared in the recent email - "As per Central Board of Direct Taxes (CBDT) Notification No. 95, dated 6 November 2019, it was provided that Form 26Q (i.e., the statutory form for filing TDS statements for payments to Indian residents) is to be modified to include an “Aadhaar” field. However, as of today, Form 26Q has not been updated to include Aadhaar. If you previously provided your Aadhaar number to Upwork, your transactions could not be reported to the Indian tax authorities. We highly recommend that you provide your PAN so that we can submit your transactions to tax authorities."

priyankrawat
Active Member
Thanks for the followup @Vladimir G. So, this means after updating my tax info with PAN, I'm good to go now? All of my previous WHT records will be updated in the traces on their own or do I have to fill some form regarding this? Also I didn't receive any email related to PAN vs AADHAAR clarification.
vladag
Community Manager

Hi Priyank,

 

Thanks for the follow-up. As long as the correct tax information is added to your Upwork account you don't need to take any other action at the moment. After the corrections in early September, you'll be able to check and confirm if the tax information you uploaded recently to your Upwork account is reflected correctly in TRACES.

 

Regarding the recently sent email notification, could you please check your inbox and spam folder for the email titled "India TDS (Form 26AS) update - Action required" and let me know if see it?

priyankrawat
Active Member
Ahhhh! The email was in the spam folder. Thanks @Vladimir G. for all the information and clearing my doubts.
73721353
Frequent Visitor

Where i can find this traces account ?

 

vipunit
Frequent Visitor
Incometax filing website. If u have submitted ONLY ADHAAR number not PAN
number on UPwork You need to cantact UPWORK support for personalized support
3be978da
Active Member

I have updated my PAN. When can I expect the update from Upwork on my tax filing portal? Since the deadline is Aug 15, I would like to be made aware of any glitches as soon as possible so I can rectify things on my end in time.

egaruth
Moderator

Hi Harsh,

 

Thank you for updating your tax information. We will submit one-time corrections to the Income Tax Department in early September.

 

786khan
Active Member

@Ravikumar, Why upwork taking TDS charges. I am filling income tax and how can i know about my paid TDS fee there?

egaruth
Moderator

Hi Malik,

 

Thank you for reaching out to us. I moved your post to this thread where you can find more recent announcement related to your concern. Please check this post for more information. 

 

Additionally, you can find more information in this helpful article about Indian Tax Deducted at Source (TDS)

 

Thank you,

ravibandaru4
Frequent Visitor

Agree with you. TDS should be on amount we receive excluding service fees

apeter5
Active Member
Does anyone notice they charge fees on their fees from us also ?
d53fd44f
Frequent Visitor

Where can I get form 24Q in each quarter. 

kochubei_valeria
Community Manager

Hi Srikanth,

You will be able to download a Form 26AS from TRACES. This form can be used to file your annual taxes. Going forward, you can also visit TRACES to see your year-to-date tax info. Additionally, we will issue a Form 16A to you each quarter.

Note that there were some Tax ID validation issues that prevented Upwork from submitting certain transaction reports to India’s tax office. These issues occurred from October 2020 to March 2021. If any of your tax information from October 2020 to March 2021 is missing from TRACES, it could be because:

- You updated the tax ID you have on file with Upwork (for example, you replaced a personal PAN with a business PAN) during these months
- There was a mismatch between the name you have on file with Upwork and the name your PAN is registered to

We will be filing an amendment in September 2021 to resubmit all missed transactions. This amendment will use the tax ID information that you have on file with Upwork as of August 15. We have also taken steps to prevent the validation issues in the future.

mastervaibhav
Frequent Visitor

Did you find the answer how to claim the with held tax charged 5% before updating the PAN?

sukanyapandiaraj
Frequent Visitor

Hello,

 

For this year's tax filing, I received the upwork email that shows that TDS was calculated and deposited based on month-end State Bank of India Telegraphic Transfer Buying Rate, for each month from October 2020 to March 2021. However, the rates used by Upwork during these months were different and lower than this rate most of the time, depending on when the payment was withdrawn. Upwork has always given the rates that their bank uses on a certain day. Since things were new this year in terms of tax laws for Indian freelancers as well as Upwork, I am not expecting any changes on this from Upwork. 

But going forward, will Upwork please notify the Indian freelancers if they will be using the State Bank of India Telegraphic Transfer Buying rate for a given month? Otherwise, it gets very complicated for individual freelancers like me. Upwork pays at a different rate, then submits our TDS showing a different rate for our income. And then we are left with having to do our own calculation trying to convince our tax department, that what you see on form 26AS has something more to it and we actually didn't get paid the income that shows on it.

 

Can Upwork standardize certain things? For example, if you are going to be using the State Bank of India month end buying rates for paying me also, then I would know the rate before I decide to withdraw on a given day. That way at least there will not be such discrepancies for the next year tax filing for the Indian freelancers.

 

We are doing so many enhancements to make this a great work place for freelancers. The above would be a simple but great enhancement that you'll be able to take credit for.

If someone can tell me that something in this regard will be done before the next tax assessment, it will be great. Reply in this regard from any wise person is also appreciated; anything other than asking me to consult my tax advisor. I don't have any.

 

Thank you.

mrshrikantgupta
Frequent Visitor

Hello Everyone

 

There are around 100s of post dated 2019-2020 on the GST and Tax thing and I want to check the latest update.

 

1. Any option where we can get INR invoice?

2. GST is included in the invoice, anyway, we can claim the same if I have a sole proprietorship firm?

3. I can see TDS transaction in TRACES (govt portal), I think we can claim back during ITR, right?

 

I am new to this, so need your help.

 

 

vladag
Community Manager

Hi Shrikant,

To your first question, please note that invoices on Upwork are issued only in USD. Please check to the recently sent email notification ("India TDS (Form 26AS) update - Action required") and refer to the conversation details and rates I'm copying from the email: 

 

Foreign Exchange rates — Your transactions are converted using the month-end State Bank of India Telegraphic Transfer Buying Rate. Please see below for your reference.
Month Rate
October 2020 USD $1 = INR 73.80
November 2020 USD $1 = INR 73.55
December 2020 USD $1 = INR 72.79
January 2021 USD $1 = INR 72.58
February 2021 USD $1 = INR 72.59
March 2021 USD $1 = INR 73.06


Regarding your second and third question, you may wish to consult with a trusted tax expert or advisor. Hopefully other freelancers who might have the specific information you're looking for follow up on your post and share their experience. As a note, the India government requires Upwork to deduct income-tax from the gross amount, which includes freelancer service fees. That being said, since payments for Upwork's services are not subject to Indian withholding tax (because Upwork's services are performed outside of India), you can deduct these expenses when filing your taxes. When filing a tax return with India, freelancers should report the gross payment from their client as income, and then claim the services fees paid to Upwork as a deduction. As mentioned, it's best to consult with a local tax expert for more detailed information.

vivekmehta1
Frequent Visitor

I need a clarification on what should be considered my earning from Upwork. I get the amount after deduction of Upwork fee hence my earning is Billed amount - Upwork fee. I have no control over the account which collects bill amounts. It is Upwork's account. I get paid after deduction and can claim only to the extent of the difference. So how can my earning be called equal to the billed amount. I have no issue with 1% TDS deduction.

Can someone clarify stand a tax man will take?

vgshyam
Ace Contributor

Hello,

  I'm from India and when I joined the upwork. I have provided AAdhar number but I saw that it is showing as PAN number instead of aadhar number and WHT is not showing my TDS account.

Now I have an updated PAN number so will I get TDS in an account?

 

Regards,

Ghanshyam

vivekmehta1
Frequent Visitor

You should. Please check your next invoicing in Txn report.

vivekmehta1
Frequent Visitor

Thanks for sharing conversion rates.

For consistency, could you please also share rates from the same source for Apr 2020-Sep 2020.

 

vladag
Community Manager

Hi Vivek,

Thank you for your question. Please note that Upwork began collecting TDS on payments to service providers in India starting October 1, 2020. and we have no historical foreign exchange rate information for the periods you're asking about.

vivekmehta1
Frequent Visitor

Hello,

 

Indian Financial year begins from 1 April and hence I need to convert my FE earnings for Apri-Sept.

If I use the same source for conversion it would be better.

Maybe you can provide me a link to get the conversion value for consistency.

Thanks

vivekmehta1
Frequent Visitor

Hello Vladimir,

This is in continuation to my email sent 4 hrs back requesting the source (link) for taking conversion rates for Apr-Sep20.

I am enclosing SBI official FE rates published for the last working day of Feb 2021.

The value in this sheet  (see highlighted) does not match with the value provided for Mar21 or Feb 21 provided by you(Upwork). The same is the case for other months hence my request.

As per my understanding rate for Mar 2021 should be taken from this Feb 21 table.

svijay84
Frequent Visitor

Any one else still facing the 26AS issue?

I updated my PAN details more than a month ago but 26AS is still not visible on my account. The last date for filing is 30th Sept, so the sooner this issue gets fixed, the better it is for us freelancers.

atn05
Active Member

Hi All,

 

Is there anyone from India here whose TDS dedducted by Upwork has not appeared in TRACES inspite of having updated all Tax Information correctly & as asked by Upwork?

 

I have been raising the issue with Upwork support for several months, but all I am getting is Standard Copy/Paste answers while the clock is ticking for me to finalise my taxes.

 

Thank you!

vladag
Community Manager

Hi Atanu,

 

I understand your frustration. I reviewed your conversation with our support team and do see you've updated your tax information as advised.

I do see our team shared this information on your tickets but I'd like to clarify that transactions of freelancers who previously provided their Aadhaar number to Upwork could not be reported to the Indian tax authorities.

For this reason we sent an email notification at the end of July to users located in India titled "India TDS (Form 26AS) update - Action required", which includes the following information: "As per Central Board of Direct Taxes (CBDT) Notification No. 95, dated 6 November 2019, it was provided that Form 26Q (i.e., the statutory form for filing TDS statements for payments to Indian residents) is to be modified to include an “Aadhaar” field. However, as of today, Form 26Q has not been updated to include Aadhaar. If you previously provided your Aadhaar number to Upwork, your transactions could not be reported to the Indian tax authorities. We highly recommend that you provide your PAN so that we can submit your transactions to tax authorities."


We will be filing an amendment to the Income Tax Department in September 2021 to resubmit all missed transactions. This amendment will use the tax ID information that you have on file with Upwork as of August 15. As long as the correct tax information is added to your Upwork account you don't need to take any other action at the moment. After the corrections in September, you'll be able to check and confirm if the tax information you uploaded recently to your Upwork account is reflected correctly in TRACES.

atn05
Active Member

Hi Vladimir G,

I appreciate your response.

 

It was Upwork who gave me the option to update either Aadhaar or PAN and I followed instructions and updated Aadhaar.

 

My PAN and Aadhaar have been linked with 'Income Tax Department' in India AT LEAST 2 years before Upwork started deducting TDS in October, 2020. So technically it should have worked. Nevertheless, I removed Aadhaar and updated PAN on 28th July 2021. But I was not sent any notification like you have mentioned for the same. It was ONLY in response to a query sent by me I was told to update the same by Upwork Support.

 

From your message it appears Upwork has not even initiated the process of rectifying this issue yet. But Upwork support told me in July that it will be all sotred out in a week or two. Then in August I was told it will be sorted out in September. And today I learn nothing has been done.

Upwork is entirely responsible for this fiasco, not me. I will be finalising my tax and pay it on 17th Sept, 2021 (I have to). Not only I am having to pay interest on the tax I owe Indian Government, but I have hired an accountant who is having to do extra and repeated work which also costs more money. Once I pay my Taxes, I would have paid the amount deducted by Upwork twice just because Upwork could not resolve this issue in time. So it's upwork's moral resposbility to refund me the amount deducted from me (roughly 60 USD only) from October 2020 - March 2021. When I asked the same question to Upwork support, they have gone all silent on me.

 

Perhaps you can see that I have been doing steady business with my client and upwork is taking their commission nicely every week. But this whole thing has left me beyond disappointed. I will seriously consider leaving Upwork and taking my business somewhere else.

 

Thank you for your time & Response. Much appreciated.

vladag
Community Manager

Hi Atanu,

 

I realise that this situation is difficult and frustrating. I've checked and can confirm an email notification was sent to your registered email address. Could you please check your inbox and spam folder for the email titled "India TDS (Form 26AS) update - Action required" and let me know if see it?


atn05
Active Member

Hi Vladimir,

 

I ran a search in my email with the subject line 'India TDS (Form 26AS) update - Action required', and only email that came up was the email notification from your message here yesterday (screenshot attached). So I definitely did not receive that notification. I also went through the spam folder manually, and usually emails from UpWork come to my Inbox.

 

Thank you & Have a good day!

manshul
Frequent Visitor

Hi there,

 

I have updated my tax information from Aadhar to PAN number before August 15 as suggested, but its september 14 and still Traces form doesn't show my TDS deducted by Upwork. The last date to file for income tax is 30 sept. please help.

dilpreet2012
Frequent Visitor

I have added my PAN Number still I got charged 5% and it has been mentioned that 1% will be charged. 
How I can get support to have 4% back which got charged addtionally.

vladag
Community Manager

Hi Dilpreet,

Thanks for your question. 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. I checked your account and it appears the most recent transactions with 5% TDS charge date before the PAN was added to your tax information. Note that the 1% withholding rate will be applied moving forward.

pkshah22
Frequent Visitor

Hi Vladimir

 

Can Upwork atleast state the date, when they are going to resubmit the correction data ? this small information will also be helpful.  First helf of September is already over, & as per the last mail I got Upwork was planning to submit the data in september so that we can file our return. but there was no statement from Upwork until now. 

 

so please kindly state when Upwork is planning to resubmit the data. 

api_jb
Frequent Visitor
Delete
vladag
Community Manager

Hi Anshul, Pratik and everyone,

As an update, amendment for transactions made from October - December 2020 was submitted early September and January - March 2021 amendment will be submitted in the coming days. Once the revised information is processed by the India tax office, information will be available to you via TRACE portal and/or revised 16A can be requested from Upwork.

Regarding the September 30th tax deadline, tax filing due date some of you have mentioned, please note that the due date has been extended. Please check the following two articles,

here and here.

dilpreet2012
Frequent Visitor

Hi Vladimir,

Thank you for providing this necessary information. I appreciate your help.

 

Thanks again..!!!

 

d08cfbb4
Frequent Visitor

hi ! im new to upwork and just wanted to know if my tax information has been approved

vladag
Community Manager

Hi Sheba,


Thanks for reaching out. Sorry, we cannot directly verify your tax information. The system on our end only checks the format and if you've managed to add your PAN number successfully, i.e. it was accepted and you didn't get an error message, you're good to go. 

Once you add the information to your Upwork account, we submit it to the Indian Tax authorities for verification. If a freelancer's PAN is invalid, their transactions will not be processed by Indian tax authorities. For accounts with an invalid PAN, Upwork may be required to withhold 5% of the transaction amount.

bijujx0a
Active Member

Can you provide the TAN  number upwork ?

This number is reqired to check the TDS in TRACES system.

 

3be978da
Active Member

I am yet to see it reflected on my account on the TRACES portal. I need to give the TDS certificate to my CA for filing tax returns. I received payments in March and am yet to see the TDS for it!

sukanyapandiaraj
Frequent Visitor

Upwork TAN is DELU07765C.

dasdibakar
Frequent Visitor
When can we expect the form 16 we are reaching the deadline. Unable to find in traces also. Please help 🙏
3be978da
Active Member

I am yet to see my TDS reflected on the TRACES portal for work/payment I received in March, 2021. My CA needs the TDS certificate for tax filing. Please let me know what I should do here.

getsetgoganesh
Active Member

Hi Team, Has 2020-21 TDS returns by Upwork got filed and it reflects in 26AS?