P1302 Purpose Code: Personal gifts and donations

Purpose code P1302 is used when money is received in India from abroad as a personal gift or donation.

What is the P1302 purpose code?

Purpose code P1302 covers money given rather than earned. A gift is money passed personally with nothing expected in return, and a donation here means giving to a person or cause without the institutional character that would send it to one of the charitable codes. What places a receipt in this group is the absence of any transaction behind it: no goods, no services, no work done. Money that arrives because someone in India supplied or did something is not a gift, whatever the sender chooses to call it. Under RBI FEMA guidelines, this inward payment is classified under Secondary Income and reported accordingly.

When to use P1302 purpose code?

This code applies where money reaches someone in India from abroad as a gift or a donation, with nothing given in return. The bank applies it when recording the remittance. Where the money is regular support for a household rather than a gift, the family maintenance code fits better, and where the recipient is a registered religious or charitable institution the charitable codes apply instead.

When to use a different code:

• Use P1301 when the money is regular support for family or savings rather than a gift
• Use P1303 when the recipient is a religious or charitable institution in India
• Use the matching S-code when money is being sent abroad rather than received

Who typically uses P1302 purpose code

Individuals in India receiving money from abroad as a gift or personal donation, whether from family, friends or others. The code concerns individuals rather than businesses or registered institutions, both of which have their own codes.

Examples of transactions covered under P1302 purpose code

• A gift sent from abroad to mark a wedding or other family occasion
• Money given by a relative overseas with nothing expected in return
• A personal donation received from someone abroad to help with a specific need
• A one-off transfer made out of generosity rather than as support or payment

When NOT to use P1302 purpose code

• The money is regular support for family or savings rather than a gift (use P1301)
• The recipient is a religious or charitable institution in India (use P1303)
• The money is payment for goods, services or work supplied to the sender, which is income under whichever code describes it
• Money is being sent abroad rather than received (use the matching S-code)

Documents required for P1302 purpose code

Personal receipts usually need less documentation than commercial ones, but the bank will still record the purpose. In general terms it will look for the following.

How is a P1302 Purpose Code declared?

The process is short, since there is no underlying transaction to evidence.

1. The sender remits the money: The gift or donation is sent from abroad to the recipient's Indian account.
2. The purpose is declared: The purpose of the inward remittance is stated on the bank's form.
3. KYC is confirmed: The bank verifies the identity of the person receiving the money.
4. The bank records the code: P1302 is applied when the remittance is recorded.
5. Reporting is completed: The payment is documented and reported under FEMA.

Common mistakes to avoid while using P1302 purpose code

A few common slips can cause reporting problems or leave you without records you need.

1. Coding income as a gift: Using P1302 for money that is payment for work you did or something you supplied, which misreports business income and leaves you without a FIRA evidencing the work.
2. Confusing a gift with family maintenance: Applying P1302 to regular support for a household, when recurring maintenance reads more naturally as P1301. Regularity and purpose usually settle it.
3. Using a personal code for an institutional receipt: Coding money received by a registered charitable or religious institution here, when those have their own codes.
4. Incomplete KYC: Verification not completed, so the bank holds the remittance until it is.
5. Code and declaration mismatch: The declared purpose not matching what the money actually is, which flags the payment.
6. Using an inward code for an outward payment: Applying a receipt code to money being sent out instead of the matching outward code.

How Skydo helps you receive international business payments

P1302 covers personal gifts and donations, which Skydo does not process. If money is reaching you from abroad because you did work for a client, that is business income rather than a gift and belongs under a different code. Here is how Skydo helps you receive it properly.

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.