Expert opinion · Exports

Paid by clients abroad: what a freelancer in India needs to know

Short answer. A freelancer in India paid by clients abroad needs no IEC for services, and need not register under GST while turnover in the year, foreign clients included, stays within ₹20 lakh (₹10 lakh in four north-eastern states). Each payment comes in under the RBI purpose code for the work, with a FIRA from the bank or an e-FIRA from a payment platform, and is taxed as ordinary income.

Developers, designers, writers, tutors and consultants in India increasingly work for clients abroad. The money arrives as a foreign remittance, so a few FEMA, GST and income-tax rules apply — fewer than most people fear, and none that need a company or an accountant to get started.

FxLayer compliance deskFEMA, RBI reporting and cross-border tax 6 min read Updated
  1. InvoiceInvoice raisedYour PAN; no GST below the threshold
  2. CodePurpose code chosenThe code for the work, e.g. P0802
  3. PaidMoney arrivesInto your bank or through a platform
  4. FIRAAdvice keptFIRA from the bank, e-FIRA from a platform
  5. TaxIncome declaredAdvance tax by 15 June, Sept, Dec, March
One piece of work for a client abroad, from invoice to tax return

Key points

  • No IEC is needed to be paid for services; you are known by your PAN.
  • GST registration is needed only once turnover in the year, foreign clients included, passes ₹20 lakh (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura).
  • Not registered: send a plain invoice with your PAN and a line saying so — no GST, no LUT.
  • Every payment needs the purpose code for the work, and a FIRA or e-FIRA kept with the invoice.
  • Foreign income is taxed like any other: plan the advance tax instalments.

No IEC for services

The Import Export Code is DGFT's number for businesses that import or export goods. A person who only provides services needs one only to claim benefits under the Foreign Trade Policy. Your bank and the tax department know you by your PAN, and every paper in this guide carries it.

GST: the threshold, and the invoice when you are below it

Exports of services are zero-rated, but they still count towards your aggregate turnover. You must register once that turnover in a financial year passes ₹20 lakh, or ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura (section 22 of the CGST Act). Below it, a supplier of services is exempt from registration even for supplies to clients outside the state or abroad, under Notification No. 10/2017-Integrated Tax. Once you pass the threshold, apply within 30 days.

An unregistered freelancer cannot issue a tax invoice and does not need a Letter of Undertaking. Send a plain invoice instead, with your name and address as on your PAN, the PAN itself, the client's name, address and country, the service and its SAC code, the amount and currency, and a line that you are not registered under GST. Once registered, export invoices go under an LUT without IGST.

The purpose code for your work

Every payment from abroad carries an RBI purpose code. For freelance work it is the code for the service: software and websites P0802, consulting P1006, digital marketing P1007, video and animation P1101, teaching P1107, accounting P1005, and P1099 for other services, which covers most design and writing. The purpose code guide has the rest. Do not let a client's payment be booked under a personal code such as gifts or family maintenance: it misstates your income.

Bank or platform: FIRA and e-FIRA

Paid straight into your bank account, savings or current, the bank asks for the purpose and issues a Foreign Inward Remittance Advice (FIRA) for each payment. Paid through a payment platform, the platform converts the money and pays you in rupees; if RBI has authorised it as a cross-border payment aggregator, it issues an e-FIRA, which serves the same purpose. A platform may handle up to ₹25 lakh in one payment for an export of services.

Keep the invoice at its full amount. The platform's fee and the bank's charges are your expenses, not a smaller invoice. Keep each FIRA or e-FIRA with its invoice: it is your proof of a payment from abroad if GST, the bank or the tax department ever asks.

The monthly EDF

From 1 October 2026 exports of services are declared to the bank once a month on the Export Declaration Form. RBI indicated on 7 October 2026 that individuals need not file it; its FAQs on the point are awaited. Until then, ask your bank and keep its answer in writing.

Income tax

Money from foreign clients is ordinary income from your profession or business and goes on your return with the rest. When the tax for the year will be ₹10,000 or more, pay it in advance instalments by 15 June, 15 September, 15 December and 15 March. If the client's country withheld tax, keep its certificate: you may be able to claim credit for it in India. Your chartered accountant can tell you whether the presumptive scheme for professionals suits you.

FxLayer handles this from one workspace on your PAN: invoices without GST with the right wording, the purpose code chosen from a description of the work, receipts into the bank or through a platform with the FIRA or e-FIRA attached, the EDF if your bank wants it, a register of foreign income by month and client, and the advance tax dates on the calendar.

Questions

Yes. A resident's savings account can receive payments for services from abroad; the bank asks for the purpose and issues the FIRA. Some banks prefer a current account once the payments are regular.
Not when the service is an export: the client is abroad, the place of supply is outside India and you are paid in foreign exchange. Issue the invoice under a Letter of Undertaking without IGST.
Yes. The marketplace collects from the client and pays you; it is still payment for a service to a client abroad. Use the purpose code for the work and keep the marketplace's statement with the FIRA or e-FIRA.
No. Signing up, invoicing and recording payments need only your PAN. A chartered accountant helps with the tax return and with questions such as the presumptive scheme or a foreign tax credit.

Sources

This article is general information on Indian foreign exchange and tax rules as they stood on the date shown. It is not legal or tax advice. Rules and limits change; confirm the current position with your AD bank, the relevant RBI Master Direction or your adviser before acting.

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