India taxes individuals based on a system of income slabs. Different tax rates are assigned to different ranges of income.&nbsp;

Understanding tax slabs is crucial for several reasons.

As a person earns more, the tax liability also increases, creating a fair and progressive tax system in the country. To achieve this, the government regularly updates and announces changes to tax slabs in the Union Budget.

The income tax slabs differ between the old and new tax regimes. Let's explore the specific slab rates applicable to Individuals for FY 2022-23 (AY 2023-24) and FY 2023-24 (AY 2024-25).

Income Tax Slab Rates For FY 2023-24 (AY 2024-25)&nbsp;

Rates of the old tax regime slabs are categorized into three groups:

The new tax regime applies uniform tax rates to all individuals, eliminating the age-based distinctions in the old system. The new tax regime slabs 2023-24 are outlined below.

Applicability of Surcharge for FY 2023-24 (AY 2024-25)

The income tax <a href="https://incometaxindia.gov.in/charts%20%20tables/tax%20rates.htm">surcharge</a> is an extra fee imposed on top of the <a href="https://www.skydo.com/blog/how-to-file-taxes-under-44ada?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">regular income tax</a>. An additional tax is applied to individuals with higher income earnings in a specific financial year. Let’s look at the applicable surcharge rate under the Old and New tax regime.

However, 25% or 37% surcharge rates will not apply to income under the following sections.

Consequently, the highest surcharge rate on the tax payable for such incomes will be 15%.

Starting from the Assessment Year 2023-24, the maximum surcharge rate on tax payable for dividend income or capital gain specified in Section 112 will be capped at 15%.&nbsp;

A 4% Health and Education cess will be applied to all cases’ total income tax liability and surcharges.

Comparison of tax rates under the New tax regime and the Old tax regime for FY 2022-23 (AY 2023-24)

How do you calculate the income tax from the income tax slabs?

Let’s understand the calculation with an example.

Sanjana, aged 35, has a total taxable income of Rs. 8,50,000. She has opted for the old tax regime. Her income includes income from salary, interest and rental income. Deductions under section 80 have been reduced. Now, Sanjana wants to know her <a href="https://www.skydo.com/blog/gst-requirements-international-service-sales?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">tax liability</a> for FY 2022-23 (AY 2023-24).

*Sanjana, an individual taxpayer under the age of 60, enjoys an income exemption limit of up to Rs 2,50,000. Other taxpayers, i.e., senior and super senior citizens, have higher income tax exemption thresholds of Rs 3,00,000 and Rs 5,00,000, respectively.

Please be aware that the tax rates in the New Tax Regime are uniform for all categories of individuals, including regular individuals, senior citizens, and super senior citizens.&nbsp;

Individuals with a net taxable income of up to Rs 5 lakh qualify for a tax rebate under section 87A, resulting in zero tax liability in both the New and Old tax regimes. It's important to note that in Budget 2023, the rebate under the new regime has been extended, making income up to Rs 7 lakh tax-free from the FY 2023-24 onward.

Let's delve into effective strategies to maximize your investments while minimizing the associated tax burdens.

ELSS mutual funds provide a dual benefit of potential capital appreciation and tax savings under Section 80C of the Income Tax Act. Investing in ELSS reduces taxable income and offers a path for long-term wealth growth.

2. Explore tax-efficient investment avenues

Health insurance qualifies for tax benefits under Section 80D. You can claim tax benefits on premiums paid - up to Rs 20,000 for senior citizens and Rs 15,000 for others. For example, if you pay Rs 15,000 for your policy and Rs 20,000 for your senior citizen parent, you can claim a total tax benefit of Rs 35,000.&nbsp;

Maturity value is tax-free for sums received under critical illness insurance policies.

This strategy entails selling loss-making assets to realize the capital loss and using it to offset the gains earned by profit-making assets.

For instance, if you have a loss of Rs. 20,000 in Stock A and a gain of Rs. 30,000 from Stock B, you can sell Stock A during a market downturn to offset the gains. This way, you can reduce your taxable income. The saved amount can be reinvested for portfolio growth.

Ensure that tax loss harvesting aligns with your overall financial goals and plan by considering a discussion with a financial professional or tax advisor.

<a href="https://www.skydo.com/blog/how-can-the-right-chartered-accountant-help-your-tech-export-business?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Consult financial professionals or tax advisors</a> for effective tax planning and strategic advice. Their expertise can provide tailored insights aligned with your financial goals and ensure a well-informed approach to optimize your tax situation.

If you need help deciding what is right for you, we will connect you with our panel of Indian and US-based CA / CPAs. Feel free to reach out to us.

Q1. How is a taxpayer's income categorized?

Ans: A taxpayer's income falls into five categories outlined in Section 14 of the Income Tax Act. These include Income from salary, Profits from a business or profession, Income from House Property, Capital Gains, and Income from Other Sources.

Q2. Is it possible to avail of 80C deductions while choosing the new tax slabs 2023-24?

Ans: No, under the new tax regime, several deductions and exemptions, including those under section 80C, are not permitted. Opting for the new tax regime means foregoing the ability to claim deductions under section 80C.

Q3. What do "Previous Year" and "Assessment Year" mean?

Ans: We have two important terms in income tax provisions: (i) Previous Year and (ii) Assessment Year. Previous Year is when you earn income, typically from April 1st to March 31st. The year right after the Previous Year, from April 1st to March 31st, is called the 'Assessment Year.'

For example, the Previous Year is from April 1, 2023, to March 31, 2024 (FY 2023-24). The corresponding Assessment Year is from April 1, 2024, to March 31, 2025 (AY 2024-25).

Q4. What is the tax exemption limit for calculating income tax rebate under section 87A?

Ans: For FY 2023-24 (AY 2024-25), the rebate limit has been increased to Rs. 7,00,000 under the new tax regime. This means a resident individual with taxable income up to Rs 7,00,000 will receive Rs 25,000 or the amount of tax payable (whichever is lower) as tax relief. However, the old tax regime's threshold limit will remain the same, i.e., Rs 12,500 if taxable income is up to Rs 5,00,000.

Q5. How much is the standard deduction for FY 2023-24?

Ans: You can claim a standard deduction of ₹50,000 to the income taxable under the head ‘Salaries.’ The standard deduction is a tax benefit that can be claimed irrespective of the amount spent on Transport or Medical Allowance. It applies to individuals earning a salary or pension income.

Prepare for the upcoming year's tax season by understanding the tax slabs for 2023-24 and optimizing your tax savings. 

Tax Slabs in 2023-24: Plan Ahead for Next Year Tax Savings

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Rohit Khuranna

Doing business globally has never been easier, until it’s time to get paid.

If you're an exporter, freelancer, or SaaS founder in India, you probably know the struggle. You finish a project or ship a product overseas… and then begins the long wait. Between delays, surprise deductions, poor exchange rates, and a ton of paperwork, getting your money from international clients can feel like a second job.

That’s where virtual bank accounts come in,&nbsp; and they’re changing the game.

Think of them as local bank accounts in the countries you do business in, without needing to actually open one abroad. You get paid like a local, skip the heavy banking charges, and see your money land in your Indian account faster and in full.

Let’s make international payments one less thing to worry about.

A virtual bank account is like a digital address for your international payments. It’s not a physical account you walk into, instead, it’s a unique account number (usually 18 digits) linked to your real Indian bank account.

When your overseas client pays you through this virtual account, the money is instantly routed to your actual bank account, without you needing to open a bank account in that country.

Now, here's the key difference:
Virtual accounts don’t hold money; they just receive and forward it. Think of them as smart couriers that collect funds and drop them directly into your home bank, minus the usual chaos of SWIFT delays or form-filling marathons.

So why are exporters and freelancers making the switch?

You don’t have to share your actual bank account details with clients. That’s one less exposure point.&nbsp;

Working with clients across the US, UK, EU, and beyond? You can set up a virtual account for each region. That means payments in different currencies, all tagged to the right client, making reconciliation smooth and stress-free.

At their core, virtual bank accounts are like “mirrors” of real bank accounts. They don’t actually hold funds, but act as smart collection tools designed to receive money, identify where it came from, and route it to your primary bank account.

Let’s break that down with a simple example:

Say you're an Indian freelancer working with clients in the US, UK, and Singapore. Instead of asking them to make an international wire transfer to your Indian bank account (which can take days and involve hefty fees), you generate a virtual account in each client’s region.

So when your US client sends you $1,000 to your US virtual account, they’re doing a local transfer, just like they would to a US-based vendor. That money is received by your virtual USD account, converted into INR, and credited to your Indian bank account, all behind the scenes.

Virtual accounts are especially helpful when working with multiple clients or marketplaces, letting you track payments separately without opening and maintaining multiple physical bank accounts abroad.

They’re not magic, just smart infrastructure layered on top of traditional banking rails.

Why Virtual Bank Accounts Work Better for Global Payments

Whether you're a freelancer, exporter, or SaaS business dealing with overseas clients, virtual bank accounts offer a smoother, faster, and more cost-effective way to get paid. Here’s how:

With traditional bank transfers, your international payments can take anywhere from 3 to 7 days to land in your account, especially if they go through SWIFT. That’s a lot of waiting, and for a business, delays hurt.

Virtual bank accounts cut this down drastically. Platforms like Skydo settle your payments within 24 hours of receipt, helping you maintain liquidity and plan cash flow more confidently.

Traditional methods come with hidden costs:&nbsp; SWIFT charges, poor exchange rates, and service fees that chip away at what you actually receive.

With virtual accounts, you bypass SWIFT entirely. Plus, platforms like Skydo offer live exchange rates with zero markup, so you get the full value of your earnings, not just what’s left after deductions.

Your virtual account is linked to your real bank account, but it doesn’t expose it. That means when you share your virtual account details with clients, your primary bank info stays private.

These accounts also come with features like:

Even if someone gets access to your virtual account number, they can’t use it to touch your funds.

How to Open a Virtual Bank Account in India (Without Any Red Tape)

Setting up a virtual bank account might sound complex, but in reality, it’s much easier than opening a traditional foreign bank account.

Look for an RBI-authorised cross-border payments platform like Skydo that offers virtual account services tailored for Indian exporters, SaaS businesses, and freelancers.

Submit your business details, PAN, GSTIN (if applicable), and bank account information. Platforms like Skydo allow you to complete the entire KYC process online, no branch visits or paperwork required.

Once verified, you'll receive virtual account numbers in key regions like the US, UK, EU, Singapore, Australia, and more. These accounts come with local details like IBANs or routing numbers, making it easy for your clients to pay you like a local.

Share these account details with your clients. When they pay you, the funds are automatically routed to your linked Indian account. With Skydo's virtual bank account, you usually receive your payments within 24 hours, with live exchange rates and no hidden markups.

Virtual bank accounts aren’t just for big businesses or finance pros — they’re built for anyone who earns across borders. Here’s how different types of users benefit:

If you're a freelancer working with international clients on platforms like Upwork, Fiverr, or through direct gigs, a virtual bank account makes it easy to get paid like a local. Instead of high PayPal fees or long wait times, you can receive payments faster, with better exchange rates, and even get FIRA for tax compliance.

Example: A designer in Jaipur can now receive USD from a US client into a virtual US account and get INR in their bank within 24-48 hours, without worrying about SWIFT delays or high forex markup.

For small and medium exporters, especially from Tier 2 and Tier 3 cities, virtual accounts simplify what used to be a paperwork-heavy process. You get global virtual collection accounts (like a US routing number or a UK IBAN), and your clients can pay like they’re making a local transfer.

It’s faster, cheaper, and you get the compliance documents like FIRA automatically.

SaaS companies billing international customers often struggle with reconciling multi-currency payments or managing multiple accounts. Virtual accounts let you:

It’s ideal for businesses scaling globally without opening foreign bank accounts or paying unnecessary overhead.

Virtual Bank Accounts by Skydo: Built for Indian Freelancers &amp; Exporters

Skydo makes it easy for Indian businesses and freelancers to receive international payments without the usual headaches of high fees, hidden markups, or long settlement times.

You get virtual accounts in key markets like the US, UK, Europe, Australia, and Singapore all set up in minutes, fully compliant with RBI norms.

Live exchange rates: You get paid at the actual mid-market rate (yes, the one on Google) with zero markup.

$29 for payments between $2,001–$10,000

No hidden fees: No SWIFT charges, no surprise deductions.

Instant FIRA: GST-compliant FIRA is auto-generated after each transaction, no chasing banks, no manual forms.

Get paid on time: Send clean, professional invoices and set up reminders with just a few clicks.

Thousands of Indian freelancers and MSMEs already use Skydo to manage their global payments.
You can get started <a href="https://www.skydo.com">for free in 5 minutes</a> — no paperwork, no waiting.

Leveraging Virtual Bank Account to maximise international payments

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LUT full form is Letter of Undertaking. An Indian exporter can use a LUT to ship goods and services outside India or Special Economic Zones (SEZs) without paying the Integrated Goods and Services Tax (IGST) upfront which otherwise applies to the export of goods and services.&nbsp;

This blog answers all the questions about LUT including LUT full form, definition, eligibility, application, and renewal process.

Exports fall under the zero-rate supply category meaning they are exempt from Goods and Services Tax (GST). However, for this to work, exporters have to pay IGST upfront and claim a refund later.&nbsp;

This is a time-consuming and complex process. They must fill out multiple forms online and upload supporting documents like export invoices and shipping bills. Additionally, if certain information is missing or there is a mismatch, the claim could be rejected.

LUT is a formal declaration submitted to GST authorities by exporters through which they can export goods and services <a href="https://www.skydo.com/blog/understanding-gstin-requirements-for-export-businesses-in-india?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">without paying IGST.</a> It’s a digital process, quick, and hassle-free, and exporters won't face a liquidity crunch.

To be eligible for availing the benefits of a Letter of Undertaking (LUT), an exporter must meet the following criteria.

According to the CGST Rules of 2017, a registered individual can provide a LUT in the GST RFD 11 form to export goods or services without paying integrated tax as long as they meet all the eligibility requirements.

Till 2020, the LUT filing process was manual. Exporters had to fill out the LUT application form on the business letterhead and submit one copy to the jurisdictional GST commissioner positioned in their principal place of business. Another copy had to be submitted to the customs clearing authority along with other export documents.

The online process is much smoother and exporters can get their LUT by following these exact steps:

Here are step-by-step instructions on how to apply for an LUT.

Step 1: Log in to the <a href="https://services.gst.gov.in/services/login">GST Portal</a>&nbsp;using credentials

Step 2: Navigate to the 'Services' tab and click 'User Services'. From there, you can select 'Furnish Letter of Undertaking(LUT)'.

Step 3: Choose the financial year for which you are applying for the LUT from the 'LUT Applied for Financial Year' drop-down menu. For instance, you can select 2024-25.

Exporters can also upload a Letter of Undertaking prepared manually. Click on "Choose File" to select it from your computer if used it in the previous financial years. The document must be in PDF or JPEG file formats and 2 MB maximum file size.

In the next screen, tick on the self-declaration checkboxes on the GST RFD-11 LUT application form to proceed. Here's what the three points are:

a) To&nbsp; export the goods or services within three months from the date of issue of the export invoice

b) To observe all the rules of the GST Act for the export of goods and services

c) To pay IGST plus interest of 18% per annum from the date of invoice to the date of payment if they do not export

Step 5: Next, you must provide the names, occupations, and addresses of two independent witnesses in the boxes. This information is mandatory.

Step 6:&nbsp;Enter the place of business in the "Place of Filing LUT" textbox and enter the name and place of the authorized signatory. An authorized signatory can be the proprietor of the company, the managing director or the company secretary.

Click on "Save." After the form is saved, click on the "Preview" button to ensure the form is filled correctly.

Step 7:&nbsp;On the same screen, there is an option to sign and file the form using either DSC or EVC.

If they have a registered Digital Signature Certificate (DSC), choose the "SIGN AND FILE WITH DSC" option. Use the DSC of the selected authorized signatory to sign the form. A warning message box will appear, click on "Proceed." The system will automatically generate a unique Application Reference Number (ARN).

The other option to file the form is to use an Electronic Verification Code (EVC). So if they don't have a DSC, they can choose this method to furnish LUT. Click on "SIGN AND FILE WITH EVC," and a One-Time Password (OTP) will be sent to the registered mobile number and email address of the authorized signatory. Use the OTP to sign the form, a warning message appears, and click "Proceed." Next step, the system automatically generates a unique Application Reference Number (ARN).

After submission, a confirmation message appears on the screen with a DOWNLOAD button to save the acknowledgement on their device. The GST Portal also sends the ARN via SMS and email to the registered <a href="https://krispcall.com/mobile-phone-number/?utm_source=skydo.com&amp;utm_medium=referral&amp;utm_campaign=Slack">mobile phone number </a>and email address respectively. You can click on the DOWNLOAD button to download the acknowledgement.

LUT is valid for one financial year meaning if an exporter wants to continue taking advantage of zero-rated supplies under GST, they must renew their LUT annually. If they do not renew LUT, they must pay IGST upfront when you export the next time.

The process to renew LUT is similar to the steps above. Here's a quick walkthrough:

After the authorities verify the application successfully, the Application Reference Number (ARN) will be sent to the authorized signatory's mobile number and email address.

What Documents are Required for LUT Registration and Renewal?

If you, as an exporter are filing LUT for the first time, you must complete the LUT registration first. Here is the list of documents required for registration:

After successfully registering for the LUT, you can fill out the GST RFD-11 form to file LUT.&nbsp;

From the next year, you can renew the LUT by following the same process above. You only have to upload a copy of the previous LUT as an additional step.&nbsp;

Receive Seamless Export Payments with Skydo

With a Letter of Undertaking (LUT), exporters don't have to bear tax payments on exports. This way they save money in an easy manner and can use the funds for other business operations. While LUT helps them save money, Skydo helps them get paid by overseas clients on time. Skydo creates virtual accounts where their clients can transfer money instantly. These accounts are linked to their bank account in India where the money gets credited automatically.

When they use a virtual account to accept payments, they don't have to pay<a href="https://www.skydo.com/blog/swift-money-transfer-ultimate-guide"> SWIFT</a> fees which are levied on international bank transfers. Moreover, they don't have to bear hidden charges as Skydo follows a transparent pricing policy. Skydo is the perfect partner to expand an exporter’s international trade.<a href="https://www.skydo.com/"> Sign up for free</a> and start accepting payments now!

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SEPA (Single Euro Payments Area) is a standardized format that lets companies, individuals, and government entities pay and receive Euro payments across 40&nbsp; European countries.

If you’re an Indian freelancer, an exporter or a SaaS company with European clients, knowing about SEPA transfers will help you understand how the system works. Providing it as a payment option could help you land more clients in these countries.&nbsp;

We suggest reading this guide till the end to understand SEPA transfer, its benefits, timeline, and how you can receive payment in India using this system.

SEPA (Single Euro Payments Area) is a payment system that makes euro transfers between participating European countries as simple, fast, and affordable as domestic transfers. Think of it as Europe's version of India's NEFT/RTGS systems, but operating across national borders. SEPA was launched in 2008 by the <a href="https://www.europeanpaymentscouncil.eu/">European Payments Council</a> as part of broader financial integration efforts within the EU.&nbsp;

SEPA currently includes 40 countries, according to the recent <a href="https://www.europeanpaymentscouncil.eu/sites/default/files/kb/file/2025-03/EPC409-09%20EPC%20List%20of%20SEPA%20Scheme%20Countries%20v6.0.pdf">European Payment Council (EPC) Geographical Scope Report</a>:

Before SEPA, sending money between European countries involved high fees, slow processing, and different formats. SEPA harmonized these systems, enabling European businesses and individuals to use only one bank account and a standardized payment format

A SEPA transfer is a euro bank transfer between accounts in any SEPA-participating countries. This standardization means every transaction follows identical technical specifications, messaging formats, and processing rules regardless of the countries involved.&nbsp;

For example, a SEPA transfer from France to Germany or Spain to Finland follows the same transaction structure and consistent information requirements, such as IBAN and BIC codes.

A SEPA transfer may appear similar to a domestic transfer, however, there are a few differences:

This method is useful for making one-time payments and can be done using the <a href="https://www.skydo.com/blog/iban-number-meaning-full-form#what-is-iban-number-india">IBAN Number</a>. In certain scenarios, you might have to use a BIC too.

Introduced in 2017, SEPA Instant Credit Transfer offers near-immediate settlement. Once a payment is initiated using this method, the funds arrive in the recipient's account within 10 seconds, even on a weekend or a public holiday. The current transaction limit for this method is €100,000.&nbsp;

In SEPA direct debit, the recipient initiates the collection rather than the payer pushing funds. But before the collection happens, the payer must provide a formal mandate, a signed authorization document containing details including the payer's IBAN, creditor identifier, and whether it's a one-time or recurring collection. Each mandate has a Unique Mandate Reference (UMR)

4. SEPA Direct Debit Business-to-Business&nbsp;

The business-to-business variant caters specifically to business transactions. Both the payer and the recipient must be non-consumer entities. This payment method is ideal for regular supplier payments, service contracts between businesses, and other commercial arrangements

Here is a step-by-step process of how a SEPA transfer takes place:

To ensure a successful SEPA transfer, the following details are mandatory:

SEPA Transfer Time: How Long Does a SEPA Transfer Take?

Here’s a table explaining the SEPA transfer timeline:

Different factors like bank cut-off times, weekdays and holidays, and the recipient’s bank’s processing are a few factors that might affect the transfer time, leading to delays.

Within the eurozone, SEPA transfers are typically free or cost just €0–€1, thanks to EU regulations that require cross-border euro transfers to be priced the same as domestic ones. So, sending money from a German bank to a French bank usually costs the same as sending it within Germany, fast, simple, and almost free.

If you're in India, though, the story changes. Since India isn't part of the SEPA network, receiving a SEPA transfer here is treated like any international wire transfer. Indian banks apply SWIFT fees, usually between ₹1,200 and ₹4,200, and also add a forex markup when converting euros to rupees. On top of that, you might face intermediary bank charges, inward remittance fees, and FIRA issuance costs. Together, these deductions can significantly eat into the amount you actually receive.

How Do You Receive SEPA Payments in India?

For Indian exporters, freelancers, and entrepreneurs working with European clients, receiving SEPA payments can be a challenge. Indian banks do not provide SEPA accounts directly.&nbsp;

Skydo solves this problem. It provides you with a virtual European IBAN account. This means you can receive SEPA payments without the hassles of international transfers. Your Europe-based clients pay you like paying any other local business, while you enjoy faster settlement and lower fees.

Why Skydo Is the Best Way to Receive SEPA Payments

If you're working with European clients, Skydo offers a seamless alternative to traditional international transfers, without the hidden costs and operational headaches.

With Skydo, you not only save on fees but also streamline the entire process of receiving international payments, letting you focus more on growing your business and less on chasing your money.

<a href="https://www.skydo.com">Create an account</a> in Skydo for free and start receiving SEPA payments.

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An RBI purpose code is a standardised, alphanumeric label that classifies the reason for a foreign inward remittance (e.g., P1401 salary, P0102 export realisation, P0802 software services). AD banks must capture and report it to the RBI for every incoming transfer under FEMA reporting.

Why the right RBI purpose code is critical (inward remittance)

Picking the correct RBI purpose code for inward remittance isn’t a formality; it directly affects compliance, speed of credit, and your documentation trail.

1) It’s a regulatory must-have (FEMA/RBI).
Authorised Dealer (AD) banks must capture and report every foreign inward transaction to RBI with a valid receipt (“P”) purpose code under FETERS. If the code is missing/wrong, banks can’t file accurate returns, triggering holds or rework.&nbsp;

2) It keeps your paperwork clean (FIRC/evidence).
The purpose you declare flows into your compliance evidence (e.g., FIRC details and audit trails). Declaring the accurate code up front helps your bank issue the right certificate without back-and-forth.&nbsp;

3) It prevents delays, manual reviews, and returns.
A vague or incorrect purpose (e.g., tagging a service payment as goods realisation) often triggers manual checks, queries, or even a return to sender until corrected.&nbsp;

4) It improves accounting clarity and BoP classification.
Purpose codes classify inflows (e.g., P01 goods exports, P08 computer &amp; information services, P10 other business services, P13 transfers, P14 income), allowing clean bookkeeping and accurate national statistics—another reason banks insist on precise coding.

5) It reduces compliance risk later.
If you repeatedly misclassify remittances, you create inconsistencies between invoices/contracts and RBI filings—raising the odds of additional questions or penalties under FEMA. Industry guidance stresses getting the code right at the remitter setup stage (sender’s bank/platform usually captures it) to avoid re-papering.&nbsp;

How to pick the correct code (step-by-step)

Find the right purpose code for inward remittance with Skydo

Our purpose code finder is your shortcut to identifying the correct purpose code for inward remittance and explaining when to use it. You can either search for the activity to find the relevant purpose code or directly look up the specific purpose code for a simple explanation of when to use it.&nbsp;

Please note that this tool doesn't contain the exhaustive purpose code list for inward remittance.&nbsp; For complete compliance and accuracy, it's always advisable to get in touch with your financial advisor for professional advice.

Personal vs. Business: Quick Selector for the Right Purpose Code

Personal / family inflows (individuals):

Business / freelance inflows (exporters, agencies, SaaS, consultants):

Common RBI Purpose Codes for Inward Remittance for Freelancers, Businesses, and Agencies

While there are over 150 RBI purpose codes for inward remittance, we break down below some of the commonly used ones especially for freelancers, businesses and agencies:

RBI Category:&nbsp;Computer &amp; Information Services

RBI Description:&nbsp;Software implementation/consultancy  (other than those covered in SOFTEX form)

When to use:&nbsp;This code signifies a foreign payment in exchange for software consultancy or implementation service, provided to a foreign client. It's important to note that P0802 applies specifically to software consultancy or implementation services that are not reported under the <a href="https://vjmglobal.com/fema/fema-fema/introduction-to-software-export-declaration-softex-form/?no_follow=true">SOFTEX form.</a> If your services fall under SOFTEX, a different code might be used.

RBI Description:&nbsp;Realisation of export bills (in respect of goods) sent on collection (full invoice value)

When to use:&nbsp;This code is used when an Indian company exports goods and receives payment for the full invoice value. Note that this purpose code is applicable only when the foreign client has received the shipment.

RBI Description:&nbsp;Advance receipts against export contracts (export of goods only)

When to Use:&nbsp;This is used when businesses receive advance payment against the contract of the goods to be exported. In other words, here the company receives payment for goods before they are shipped.

RBI category:&nbsp;Other Business services

RBI Description:&nbsp;Business and management consultancy and public relations services