Resident indian deriving dollars

Save Share

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 October 2013 Hi,

Resident indian providing professional services to a US citizen and receiving dollars.
What will be the taxation in India and the best way to bring the money into the country?

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

24 October 2013 The whole of the income shall be taxable in India. However, you may claim deduction for the taxes withheld, if any, by the US citizen.

Querist : Anonymous

Querist : Anonymous (Querist)

24 October 2013 What will be the best way to bring the remittance into the country?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
Follow

21 July 2025 Taxation & Remittance for a Resident Indian Earning in USD (Professional Services)
📌 Taxation in India
As a resident Indian, your global income is taxable in India under the Income Tax Act, 1961, regardless of the currency received or the country of origin.

Professional fees received from a US client will be taxed as "Income from Business or Profession".

You can deduct business expenses to arrive at your taxable income.

Tax Rate: Based on normal slab rates applicable to individuals.

TDS in the US: If the US payer deducts any TDS (typically under IRS rules), you may be eligible to claim Foreign Tax Credit (FTC) in India by filing Form 67 before filing your ITR.

✅ Best Way to Bring USD Remittance to India
💡 Recommended Method: Foreign Inward Remittance via Banking Channels
Use official banking routes to receive funds, such as:

Wire Transfer (SWIFT):

Ask your US client to send payment to your Indian bank account via SWIFT.

Provide:

Your bank’s SWIFT code

Bank account number

Beneficiary details (name, address, etc.)

Purpose code (use the correct RBI purpose code, e.g., P0805 – Consultancy services)

PayPal / Payoneer (for freelancers):

Common for small-value service payments.

Ensure money is withdrawn into your Indian bank account.

Conversions will happen automatically.

Wise (formerly TransferWise) / Remitly / OFX:

These platforms offer good exchange rates and are fast.

Still require you to comply with RBI guidelines and declare the purpose of remittance.

🔒 Compliance Notes:
Use Purpose Codes when receiving foreign currency (especially for 15CA/CB or RBI reporting).

Keep FIRC (Foreign Inward Remittance Certificate) for your records — useful for tax and export compliance.

Report USD earnings while filing ITR and disclose foreign income under Schedule FA, if applicable.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join CAclubindia WhatsApp Finance Community & stay updated with the latest TAX news, compliance alerts and important updates all in one place!