P0024 Purpose Code: External Assistance received by India

Purpose code P0024 is used when the Government of India receives external assistance from a foreign government or an international institution.

What is the P0024 purpose code?

Purpose code P0024 covers money coming into India as external assistance, meaning loans and support extended to the Government of India under agreements with other governments or with international institutions. Bilateral assistance comes from a single foreign government, multilateral assistance from an institution funded by many, and both report here. What separates this from the commercial borrowing codes is who borrows and on what basis: this is sovereign assistance under an intergovernmental agreement rather than a company raising debt on market terms. Under RBI FEMA guidelines, this inward payment is classified under Capital Account and reported accordingly.

When to use P0024 purpose code?

Use P0024 when assistance extended to India by a foreign government or an international institution is drawn into the country. It is the correct RBI receipt code for the inflow of external assistance itself, on the receiving side. The borrower being the Government of India under an intergovernmental or institutional agreement is what places a receipt here rather than under the commercial borrowing codes.

When to use a different code:

• Use P0025 when the money is repayment coming back on external assistance India itself extended to another country
• Use P0012 when an Indian entity other than the government borrows from a non-resident on commercial terms
• Use the matching S-code when money is going abroad rather than being received

Who typically uses P0024 purpose code

The Government of India receiving multilateral and bilateral assistance, together with the banks that receive and report those inflows. This code does not apply to companies, exporters, or individuals, since the assistance is extended to the sovereign under agreements it enters into directly.

Examples of transactions covered under P0024 purpose code

• A tranche drawn by the Government of India under a loan agreement with an international development institution
• Bilateral assistance received from a foreign government under an intergovernmental agreement
• Funds released to India under a multilateral programme agreed with an international institution
• A disbursement received against an existing external assistance commitment

When NOT to use P0024 purpose code

• The money is repayment on assistance India extended to another country (use P0025)
• An Indian company or entity other than the government is borrowing from a non-resident on commercial terms (use P0012 for maturity above one year)
• The money is a grant or donation to a government or charitable institution rather than external assistance under an intergovernmental agreement, which reports under the transfer codes
• Money is going abroad rather than being received (use the matching S-code)

Documents required for P0024 purpose code

To receive a payment under P0024, the following records support the transaction so it can be verified and reported correctly under FEMA.

How is a P0024 Purpose Code declared?

Declaring the code is pretty straightforward. Here's how the payment gets tagged and reported.

1. Conclude the agreement: The assistance is agreed with the foreign government or international institution.
2. Receive the disbursement: Funds are released under the agreement and remitted to India.
3. Declare the purpose: The purpose of the inward remittance is stated on the applicable form.
4. Record the supporting documents: The agreement and disbursement advice evidence what was received.
5. Report under FEMA: The receipt is reported under this code as part of periodic reporting.

Common mistakes to avoid while using P0024 purpose code

A few common slips can cause misreporting. Here's what to watch for.

1. Confusing assistance received with assistance repaid: Using P0024 for money coming back on assistance India extended abroad, which belongs under P0025.
2. Treating commercial borrowing as external assistance: Applying P0024 to a company's loan from an overseas lender, when that is external commercial borrowing under P0012 or P0013.
3. Code and document mismatch: The code not matching what the assistance agreement describes, which flags the transaction.
4. Incomplete documents: Missing the agreement or disbursement advice, leaving the receipt unsupported on review.
5. Missing verification records: Incomplete records on the counterparty hold up the reporting.
6. Using an inward code for an outward payment: Applying a receipt code to money going out instead of the matching outward code.

How Skydo helps you receive international business payments

P0024 covers capital account transactions, which Skydo does not process. If you also invoice foreign clients for goods or services, here is how Skydo helps you get paid.

1. Complete onboarding: Share PAN, Aadhaar, and Indian bank details. Setup is fully online.
2. Get virtual account details: Receive account details in USD, GBP, EUR and other currencies your clients pay in.
3. Your client pays like a local: They send a domestic transfer in their own country, no SWIFT and no wire fee on their end.
4. FIRA is generated automatically: Free e-FIRA on every payment, stored in your dashboard for GST and audits.
5. INR settles within 24 hours: Mid-market rate with a flat, visible fee, no FX markup.