Repatriation of income from Forex Trading advisory/ consulting services from UAE to India
This query is : Resolved
18 October 2025
I am an Indian resident and owner of company. A UAE resident, holds a forex trading account in his name and has approached me to provide him advisory serviced for forex trading . He will be paying me commission (fixed + performance based). I wish to receive the commission to India in a fully legal and compliant manner and am prepared to pay any applicable taxes in India.
Please advise on the correct and compliant mechanisms to repatriate these funds to my company account (for recognition as business/ profession income), including:
* The legal basis for remittance of commission paid as professional/service income,
* Regulatory compliance required under FEMA/other RBI rules.
* Tax consequences in India (income characterization, TDS, etc).
* Any documentation or agreements needed (professional services agreement, invoices, KYC, bank declarations).
* Reporting and disclosure requirements for the company (income tax returns, transfer pricing, RBI reporting, Form 15CA/15CB if applicable).
* Any additional steps to avoid unintended tax or regulatory complications.
I would appreciate an outline of the preferred options, associated tax/regulatory implications, and a checklist of documents I should prepare.
Please advise on the correct and compliant mechanisms to repatriate these funds to my company account (for recognition as business/ profession income), including:
* The legal basis for remittance of commission paid as professional/service income,
* Regulatory compliance required under FEMA/other RBI rules.
* Tax consequences in India (income characterization, TDS, etc).
* Any documentation or agreements needed (professional services agreement, invoices, KYC, bank declarations).
* Reporting and disclosure requirements for the company (income tax returns, transfer pricing, RBI reporting, Form 15CA/15CB if applicable).
* Any additional steps to avoid unintended tax or regulatory complications.
I would appreciate an outline of the preferred options, associated tax/regulatory implications, and a checklist of documents I should prepare.
19 October 2025
You can legally receive commission from a UAE resident into your Indian company account by treating it as export of professional services, subject to FEMA, RBI, and Income Tax compliance.
- FEMA Notification No. FEMA 14(R)/2016-RB governs the Manner of Receipt and Payment for cross-border services.
- Your company can receive foreign exchange for advisory services under the category of export of services, which is a permissible current account transaction.
- The UAE resident must remit funds through normal banking channels (SWIFT/TT) to your company’s current account in India.
- FEMA Notification No. FEMA 14(R)/2016-RB governs the Manner of Receipt and Payment for cross-border services.
- Your company can receive foreign exchange for advisory services under the category of export of services, which is a permissible current account transaction.
- The UAE resident must remit funds through normal banking channels (SWIFT/TT) to your company’s current account in India.
19 October 2025
Tax Consequences in India
Such income is taxable as business/professional receipts under the Income Tax Act.
If services are rendered in India (remote advisory for overseas account), income is taxable in India and must be disclosed accordingly in ITR.
TDS (tax deducted at source) on inbound payments is generally NOT applicable since the payer (UAE resident) is not liable to deduct TDS under Indian law. Only outbound payments to non-residents involve TDS (Section 195).
Goods and Services Tax (GST) may apply if total turnover exceeds exemption threshold. "Export of services" can generally be zero-rated for GST if all conditions are met.
Such income is taxable as business/professional receipts under the Income Tax Act.
If services are rendered in India (remote advisory for overseas account), income is taxable in India and must be disclosed accordingly in ITR.
TDS (tax deducted at source) on inbound payments is generally NOT applicable since the payer (UAE resident) is not liable to deduct TDS under Indian law. Only outbound payments to non-residents involve TDS (Section 195).
Goods and Services Tax (GST) may apply if total turnover exceeds exemption threshold. "Export of services" can generally be zero-rated for GST if all conditions are met.
19 October 2025
Legal Basis for Remittance
Commission payments for genuine professional/advisory services qualify as permissible current account transactions under the Foreign Exchange Management Act (FEMA). As long as services are provided remotely (not involving margin trading by the Indian entity itself), remittance from abroad for consultancy or advisory is permitted by RBI, generally under the automatic route up to USD 1 million per project (higher for infrastructure).
Regulatory Compliance under FEMA/RBI
Remittances must be routed through authorized dealers (banks).
Banks may require Form A2 and a self-declaration regarding the nature of the transaction.
Documentation should demonstrate that funds are for professional services, not investment or illegal margin trading.
Ensure that the foreign payer and transaction details are clear for proper FEMA classification; stay updated on RBI notifications on cross-border service payments.
Commission payments for genuine professional/advisory services qualify as permissible current account transactions under the Foreign Exchange Management Act (FEMA). As long as services are provided remotely (not involving margin trading by the Indian entity itself), remittance from abroad for consultancy or advisory is permitted by RBI, generally under the automatic route up to USD 1 million per project (higher for infrastructure).
Regulatory Compliance under FEMA/RBI
Remittances must be routed through authorized dealers (banks).
Banks may require Form A2 and a self-declaration regarding the nature of the transaction.
Documentation should demonstrate that funds are for professional services, not investment or illegal margin trading.
Ensure that the foreign payer and transaction details are clear for proper FEMA classification; stay updated on RBI notifications on cross-border service payments.
19 October 2025
Documentation & Agreements
Prepare and maintain:
Professional services agreement/contract specifying scope, fee structure (fixed + performance commission), currency, dispute mechanism.
Invoices raised for each payment received.
KYC documentation of the UAE resident (passport, address, trading license etc.).
Bank declarations/letters identifying payment as business income.
Any correspondence, proof of service delivery, reports sent, or advisory notes.
Prepare and maintain:
Professional services agreement/contract specifying scope, fee structure (fixed + performance commission), currency, dispute mechanism.
Invoices raised for each payment received.
KYC documentation of the UAE resident (passport, address, trading license etc.).
Bank declarations/letters identifying payment as business income.
Any correspondence, proof of service delivery, reports sent, or advisory notes.
19 October 2025
Reporting & Disclosure
Income to be shown under "Business/Profession" in company’s Income Tax Return (ITR).
If total receipts from one UAE party exceed INR 30 lakh, transfer pricing and documentation rules may apply.
Submit GST returns (if registered), marking income as export of services.
RBI reporting may be needed for large/recurring transactions, usually completed by the bank as part of Form A2. If the bank requests, you may also need to file Form 15CA/15CB (especially for larger amounts, though in most inbound cases, this is not required).
Maintain robust records for future scrutiny.
Income to be shown under "Business/Profession" in company’s Income Tax Return (ITR).
If total receipts from one UAE party exceed INR 30 lakh, transfer pricing and documentation rules may apply.
Submit GST returns (if registered), marking income as export of services.
RBI reporting may be needed for large/recurring transactions, usually completed by the bank as part of Form A2. If the bank requests, you may also need to file Form 15CA/15CB (especially for larger amounts, though in most inbound cases, this is not required).
Maintain robust records for future scrutiny.
19 October 2025
Steps to Avoid Complications
Ensure you do NOT participate in trading or margin segments (prohibited for Indians unless registered overseas).
Retain all contracts, agreements, invoices, and KYC for at least 8 years.
Clarify in agreements the nature of services is strictly advisory, not trading or fund management.
Consult a qualified CA for annual tax filing, transfer pricing study (if needed), and ensure proper GST compliance.
Check FEMA rules annually for updates on cross-border service transactions.
Ensure you do NOT participate in trading or margin segments (prohibited for Indians unless registered overseas).
Retain all contracts, agreements, invoices, and KYC for at least 8 years.
Clarify in agreements the nature of services is strictly advisory, not trading or fund management.
Consult a qualified CA for annual tax filing, transfer pricing study (if needed), and ensure proper GST compliance.
Check FEMA rules annually for updates on cross-border service transactions.
19 October 2025
Checklist of Documents
Professional Services Agreement (signed)
KYC documents of payer and payee
Tax Residency Certificate of the company
Bank declaration or covering letter
Invoices (clearly mentioning advisory/consultancy as service nature)
Proof of service delivery (emails, reports, performance summaries)
Company PAN, GST registration (if applicable)
RBI reporting forms (if required)
Accounting entries reflecting foreign commission as business income
Any correspondence with the UAE resident.
Professional Services Agreement (signed)
KYC documents of payer and payee
Tax Residency Certificate of the company
Bank declaration or covering letter
Invoices (clearly mentioning advisory/consultancy as service nature)
Proof of service delivery (emails, reports, performance summaries)
Company PAN, GST registration (if applicable)
RBI reporting forms (if required)
Accounting entries reflecting foreign commission as business income
Any correspondence with the UAE resident.
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