How to Receive Money From Abroad in India: A Step-by-Step Guide

The short answer

To receive money from abroad in India, you need a receiving channel (a bank account or a payment platform with international receiving details), a way to make sure the money converts at a fair rate, and a FIRA (Foreign Inward Remittance Advice) as proof the money came in as foreign currency — which you’ll need for tax filing. In practice: share the right receiving details with your client, invoice with the correct currency and purpose of payment, let the payment arrive and convert, collect your FIRA, and reconcile it against your invoice. The six steps below walk through each part.

Key takeaways

• You don’t need to do anything unusual to receive foreign payments legally — for freelancers and businesses, it’s simply an export of services, and FEMA (the law governing foreign exchange) permits and expects this.
• The channel you choose determines your cost far more than any “processing fee” line item does. The real cost is the gap between the mid-market exchange rate and what you’re actually given.

• Always ask for a FIRA, not just a bank credit. Without it, you can’t prove the money was foreign income when GST or income-tax time comes.

• Your GST rate on export income can legally be zero — with a Letter of Undertaking (LUT) — but only if the money arrives as proper foreign exchange with FIRA proof.

• This is general information, not tax advice. Confirm your specific thresholds and filings with a qualified CA.
  
  
  

Step 1: Choose your receiving channel

Before your client can pay you, you need somewhere for the money to land. Broadly, you’re choosing between:

• A direct bank account (SWIFT/wire). Works with any bank worldwide, no setup needed beyond your existing account, but usually carries the largest FX markup and sometimes an unexpected “intermediary bank” deduction.

•  A wallet/gateway (PayPal, Stripe). Fast and familiar to clients, but among the costliest for you once fees and conversion markup are counted.

• A multi-currency account (Wise, Payoneer).  Gives you local receiving details in the client’s currency and converts closer to the real rate.

• A collection account built for exporters (Remit Circle, and similar India-first platforms). Purpose-built for this exact flow — local receiving details, a rate close to mid-market, and FIRA generated automatically per payment.

There’s no single right answer — a one-off large payment might suit a direct wire; a client who only uses PayPal means you use PayPal for that invoice. But for regular invoices, the channel you pick compounds: a 3–4% gap on every payment adds up fast across a year.

Step 2: Share the correct receiving details

Once you’ve picked a channel, give your client precisely what they need to route the payment correctly:

•  Your account details (SWIFT/BIC and account number for a wire; or the local receiving details your platform provides).

•  The currency you want paid in — usually your client’s local currency or USD.

• The purpose of payment, so the sending bank routes and codes it correctly. India uses RBI purpose codes for this — for IT/software services, common illustrative examples are P0802 (software consultancy) and P0807 (other IT services). Your bank or platform will confirm the right code if you’re unsure.

Getting this step wrong is the single most common cause of a payment being delayed, part-returned, or landing without the documentation you need later.

Step 3: Let the payment arrive and convert

Once your client pays, the money moves through the banking system (or your platform’s rails) and gets converted from their currency to INR. This is where most of the “leakage” happens, and it’s worth understanding exactly what to check:

• The mid-market rate is the real, no-markup exchange rate — the one Google shows you.
• The FX markup is the gap between that rate and what you’re actually given. A “0% fee” service that quietly marks up the rate by 4% has still taken 4% from you.
• Fixed and percentage fees are on top of that. Compare providers on the final INR that lands for a given amount, not the advertised headline fee — that’s the only number that’s actually comparable.

If your channel supports it, you can sometimes hold the payment in foreign currency for a short period (via an EEFC account) before converting, if you want to time the conversion rather than take whatever rate is live that day.

Step 4: Collect your FIRA

A FIRA (Foreign Inward Remittance Advice, the modern electronic form of what used to be a physical FIRC) is the document that proves this money arrived as foreign currency through a legitimate banking channel. You’ll need it for:

• Income tax filing, as proof of foreign income.

• GST export-refund claims, if you’ve paid IGST and want it back.

• FEMA compliance, if your foreign receipts are ever reviewed.

• Occasionally, visa or loan applications.

Handling differs by channel: purpose-built collection accounts and PayPal typically generate it automatically per transaction (or monthly, for PayPal); a direct bank wire usually means requesting it from your bank, which can take a few days and sometimes a small fee (roughly ₹100–₹1,000 depending on the bank, with the electronic version often cheaper). Peer-to-peer transfer apps (built for personal remittances, not exports) often don’t issue a FIRA at all — a good reason to keep those apps for personal transfers only, not client income.

Step 5: Reconcile against your invoice

Match the amount that landed to the invoice you sent — noting the exchange rate used, the fees deducted, and the purpose code applied. Keep the FIRA filed alongside the invoice. This is tedious to do manually and exactly what a good platform automates; either way, it’s the record your CA will ask for at filing time.

Step 6: Handle the tax side correctly

This is the step people either skip or over-worry about — neither is right. A few things to know, precisely:

• Your foreign service income is an export, and exports are zero-rated under  GST — if you’ve filed a Letter of Undertaking (LUT). Without an LUT, you may need to pay IGST upfront and claim it back later. The tax isn’t being avoided here — the export is genuinely, legally zero-rated; the FIRA is your proof.
• The zero-rating depends on the money actually arriving as convertible foreign exchange with valid FIRA proof — without that, the same payment could be treated as a domestic supply instead of an export.
• If you pay for foreign SaaS tools (Zoom, Canva, AWS, and similar), that’s technically an import of services, which can trigger GST under the Reverse Charge Mechanism (RCM) — regardless of your turnover. It’s a commonly missed detail.
• The GST registration threshold has conditions, not a blanket “under ₹20L, never register” rule — RCM above is one exception. Confirm where you personally stand.
• Presumptive taxation (Section 44ADA) can simplify filing for eligible professionals, letting you declare a portion of receipts as taxable income, up to a ceiling — verify the current figure for your situation.
•  If you hold a foreign account or balance, note that Schedule FA reporting runs on the calendar year (Jan–Dec), not India’s usual financial year — a mismatch that has caught out people who assumed the two matched.

Disclaimer: This is general information, not tax, legal, or financial advice. Rules and thresholds change and depend on your specific circumstances. Confirm your position with a qualified Chartered Accountant before filing or relying on any figure here.

Common mistakes to avoid

• Comparing “fees” instead of the final amount received. A provider with no visible fee can still cost more once the FX markup is counted.
• Using a personal remittance app for business income. Convenient, but usually no FIRA — which becomes a problem the moment you need to prove the income was foreign.

• Skipping the LUT and assuming GST is automatically zero. It’s conditional on filing the LUT and having valid proof of export.

• Forgetting the RCM trap on foreign software subscriptions, which can trigger GST registration even under the usual threshold.

• Treating the FIRA as optional paperwork. It’s the one document that ties everything else together at filing time — collect it every time, not just when your CA asks.

A note for each of the top 10 countries

The six steps above are identical wherever your client is based — but here’s the currency and practical detail to keep in mind for each of India’s top 10 trading partners (ranked by goods-export value, FY2024-25 — a reasonable proxy for where most Indian exporters’ clients are concentrated):

Whichever of these ten a client sits in, the underlying job is the same: get the receiving details right (Step 2), get the real exchange rate rather than a marked-up one (Step 3), and collect the FIRA (Step 4) — the country just decides the currency you’re doing it in.

Where Remit Circle fits

The steps above are the same regardless of tool — but how much friction each one takes depends entirely on the channel you picked in Step 1. A collection account built specifically for this flow (which is what Remit Circle is) gives you local receiving details so clients pay like a local, converts near the mid-market rate instead of a marked-up one, and generates the FIRA automatically per payment — so Steps 3, 4 and 5 mostly take care of themselves. Worth comparing against whatever you’re currently using, on a real invoice.