P1590 Purpose Code: Receipts below $10,000 (say Rs 5,00,000)

Purpose code P1590 is used when an Indian resident receives a low-value inward remittance below the reporting threshold of $10,000, or roughly Rs 5,00,000.

What is the P1590 purpose code?

What is the P1590 purpose code?

Purpose code P1590 is used when an Indian resident receives a low-value inward remittance below the RBI's reporting threshold of $10,000, or roughly Rs 5,00,000, and the remittance does not fit a more specific purpose code. This gives banks a simplified way to report small receipts without requiring the same level of itemised documentation as larger transactions. If your receipt is small in value but clearly matches a specific code, such as a goods export or software service code, use that code instead of P1590 purely because of the size. Under RBI FEMA guidelines, this inward payment is classified under Others and reported accordingly.

When to use P1590 purpose code?

When to use P1590 purpose code?

When to use a different code:

• Use P1590 when you receive a small inward remittance below the $10,000 threshold that does not clearly match a more specific purpose code. It exists to simplify reporting on genuinely low-value, miscellaneous receipts.
• Use the matching service or goods code, such as P0802 for software services, when the transaction clearly fits a specific category regardless of value
• Use P1501 when the payment is a refund or rebate on an import rather than a fresh low-value receipt
• Use the matching S-code when you are paying a foreign vendor rather than receiving money

Who typically uses P1590 purpose code

Who typically uses P1590 purpose code

Freelancers, small businesses, and individuals in India receiving occasional low-value payments from abroad that do not clearly fit a more specific code. It applies whether you invoice as an individual, proprietorship, or registered company.

Examples of transactions covered

• Examples of transactions covered under P1590 purpose code
• A one-off small payment from an overseas client that does not match a specific service code
• A low-value personal receipt from abroad under the reporting threshold
• A miscellaneous small payment for a minor service or one-time task performed for a foreign client
• A residual small-value receipt that a bank classifies as below-threshold rather than itemising separately

When NOT to use P1590 purpose code

• When NOT to use P1590 purpose code
• The transaction clearly fits a specific goods or service code regardless of its value (use that code instead)
• The payment is a refund or rebate on an import (use P1501)
• The payment is a reversal of a wrong entry or refund for a non-import (use P1502)
• You are paying a foreign vendor rather than receiving (use the matching S-code)

Documents required

Documents required for P1590 purpose code

To receive a payment under P1590, keep the following documents ready so your bank can verify the transaction and report it correctly under FEMA.

How is a P1590 Purpose Code declared?

How is a P1590 Purpose Code declared?

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

1. Confirm the value: Check that the receipt is genuinely below the $10,000 threshold.
2. Receive the payment: The sender remits the funds to your bank or receiving account.
3. Declare the purpose: State the purpose of the inward remittance using P1590 on your bank's form.
4. Submit supporting documents: Provide the remittance advice, a brief description, and KYC so the bank can verify the transaction.
5. Get your FIRA: Once processed, your FIRA is issued as proof and the payment is reported under FEMA.
6. With a traditional bank you handle each step of your payment journey. But with a platform built for cross-border payments, you can preselect a default purpose code so that the payments land smooth.

Common mistakes to avoid

Common mistakes to avoid while using P1590 purpose code

A few common slips can hold up your payment or cause compliance issues. Here's what to watch for.

1. Defaulting to P1590 unnecessarily: Using this code for a small receipt when a specific code, like a goods or service export code, actually applies regardless of value.
2. Code and description mismatch: The code not matching the brief description given for the payment, which flags the transaction.
3. Incomplete documents: Missing remittance advice, description, or KYC, so the bank holds funds until provided.
4. Missing PAN or KYC: Incomplete verification stops the bank from releasing the payment.
5. Repeatedly using P1590 for what is really recurring business income: Understating a regular income stream as a series of below-threshold receipts, which invites scrutiny.
6. Using an inward code for an outward payment: Applying a receipt code to money you're sending out instead of the matching outward code.

How Skydo helps Indian businesses with cross-border payments

How Skydo simplifies inward remittance under P1590 Purpose Code

With a bank, you declare the purpose code on your own for every single payment. With Skydo, you can preselect your code once and every payment gets tagged automatically.

1. Preselect the code once - Set P1590 as your default and Skydo tags every incoming payment for you, so there's no form to fill on each one.
2. No repeat declarations - A bank makes you restate the purpose for every remittance. Skydo does it in the background, the same way each time.
3. Instant, free FIRA - Your remittance proof is generated and stored on every payment, ready for your CA, GST, and audits, with no request and no fee.
4. Zero FX markup - You get the live mid-market rate with a flat, visible fee, instead of a markup hidden inside the bank's rate.
5. Settled in 24 hours - Your payment reaches your Indian bank within a day, fully reported and compliant.