Getting Paid From Abroad

The options Indian freelancers have for receiving payments from foreign clients, the hidden costs of exchange rates and fees, and the paperwork that proves export income.

Indian freelancers increasingly work for clients in the US, Europe, the Middle East and elsewhere. Receiving money across borders involves costs and paperwork.

Common options

Bank wire transfer (SWIFT): the client sends money directly to your Indian bank account. Banks may charge fees on both ends, and intermediary banks can take a cut.
Payment platforms: services such as PayPal and others let clients pay by card or bank transfer. They are convenient but can charge fees and apply their own exchange rates.
Cross-border payment specialists: some services offer local account details in other countries and lower conversion costs.
Freelance marketplaces: platforms that handle payments and then withdraw to your bank.

The hidden cost: exchange rates

Fees are often small compared with the exchange rate markup. If the mid-market rate is 85 rupees per dollar but a service converts at 83, you lose about 2.4 percent. On large sums, this adds up.

Compare the total amount received in rupees across options, not just the stated fee.

Paperwork

Banks issue a Foreign Inward Remittance Certificate (FIRC) or an e-FIRA (Foreign Inward Remittance Advice) confirming money received from abroad. These are important as:

Proof of export for GST purposes.
Records for income tax.

Payments must be tagged with the correct purpose code, such as software or consulting services, so banks classify them properly.

Taxes

Foreign income is taxable in India like other income. If tax was withheld abroad, you may be able to claim credit under tax treaties.

Tips

Compare providers every so often; rates and fees change.
Invoice in the client’s currency to make paying easy, but check conversion costs.
Keep FIRCs or FIRAs for every payment.

Comparing two routes

A consultant receives 5,000 dollars. Route A charges no fee but converts at a rate 2.5 percent below mid-market, costing about 10,600 rupees. Route B charges a 20 dollar fee with a rate 0.5 percent below mid-market, costing about 3,800 rupees. Route B is much cheaper overall.

Thinking a "zero fee" transfer is free

Exchange rate markups can cost far more than stated fees. Compare the final rupee amount.

Key takeaways

Freelancers can use bank wires, payment platforms or specialist services.
Exchange rate markups are often the biggest hidden cost.
FIRCs or FIRAs prove export income for GST and tax.
Compare the final rupee amount received across options.