Resident indian deriving dollars

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)
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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

Aashok Kumar Sharma (Expert)
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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Ensure money is withdrawn into your Indian bank account.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.

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