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.



 

454 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