I work full time from India as a contractor for a US company: what applies?
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Short answer
A contractor who invoices a US company from India is an exporter of services, not an employee, for Indian purposes: once aggregate turnover passes ₹20 lakh you register for GST and invoice under a Letter of Undertaking, and every monthly invoice needs an Export Declaration Form and realisation within nine months.1234 The IRS says pay for services performed outside the US is not subject to US withholding for a nonresident alien, and in India the fees are professional income, often within the 50% presumptive scheme for IT work up to ₹50 lakh or ₹75 lakh.56
Many Indian developers, analysts and designers work full time for one US company without being on its payroll. They sign a contractor agreement and send a monthly invoice. For Indian law, that makes them a one-client export business.
Do I need GST registration?
Probably, at a full-time rate. Notification No. 10/2017-Integrated Tax exempts inter-State service suppliers only up to ₹20 lakh of aggregate turnover in a financial year (₹10 lakh in special category States), and exports count.1 Once registered, file a Letter of Undertaking (LUT) each financial year and put the rule 46 endorsement on every invoice, so no GST is charged.2 If a US payment is not received within one year of the invoice date, rule 96A makes the tax payable with interest.2 See how to file an LUT.
What does the RBI require each month?
From 1 October 2026, you file an Export Declaration Form (EDF) with your bank within 30 days from the end of the month in which you invoiced.3 Each invoice must be realised within nine months of its date.4 The purpose code is usually P0807 or P0802 for software work.8 See recurring international invoices.
Will the US company withhold US tax?
It should not, for work done in India. IRS Publication 515 says the place where services are performed determines the source of personal service income, and that compensation paid to a nonresident alien for services performed outside the United States is not wages and is not subject to withholding.5 Give the company Form W-8BEN; without it, the payer may have to withhold at 30%.7 See Form W-8BEN for Indian freelancers.
How is the income taxed in India?
The fees are professional or business income. If your work is a specified profession such as information technology, Table row 3 of section 58(2) of the Income-tax Act, 2025 deems 50% of gross receipts as profit, for receipts up to ₹50 lakh, or ₹75 lakh if cash receipts are within 5%.6 See section 44ADA for freelancers.
A contract that controls your hours, equipment and leave like an employer would can blur the line between contractor and employee. If yours does, ask a chartered accountant how it should be treated.
How did we verify this?
We checked this page against the sources below on 28 October 2026. Read our methodology or report an error.
- [1]Notification No. 10/2017-Integrated Tax (exemption from registration for inter-State suppliers of taxable services), GSTZen reproduction
- [2]CGST Rules, 2017 (consolidated), rules 46 and 96A, CBIC
- [3]RBI: Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, Notification No. FEMA 23(R)/2026-RB, amended up to 22 September 2026 (regulations 3 and 5)
- [4]RBI: Notification No. FEMA 23(R)/(1)/2026-RB dated 22 September 2026 (amendment to regulation 5)
- [5]IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities (checked 28 October 2026)
- [6]Income Tax Department: Income-tax Act, 2025, section 58 (presumptive taxation, Table row 3)
- [7]IRS: Instructions for Form W-8BEN (Rev. October 2021) (checked 28 October 2026)
- [8]HDFC Bank: Inward Remittance Purpose Codes (bank reproduction of the RBI list, checked 28 October 2026)
Frequently asked questions
Am I an employee of the US company for Indian tax?+
Not if you work under a contractor agreement and invoice for services; the fees are business or professional income. If the arrangement looks like employment in substance, the answer can change.
Should I give the US company Form W-9?+
No. A non-US individual gives Form W-8BEN. Without it the payer may have to withhold at 30%.7
What if my receipts cross ₹50 lakh?+
Table row 3 of section 58(2) applies up to ₹50 lakh of gross receipts, or ₹75 lakh if cash receipts are within 5%. Above that you compute actual profit.6
Which purpose code fits monthly development invoices?+
Off-site development is commonly reported as P0807 (Off-site Software Exports) or P0802 (Software consultancy/implementation). Agree the code with your bank.8
This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.
Keep reading
How should an Indian freelancer fill Form W-8BEN for a US client?
What Form W-8BEN and W-8BEN-E are, why US clients and platforms ask for them, which India-US treaty articles apply, key lines, and validity.
TaxCan Indian freelancers use section 44ADA (now section 58) to pay tax on 50% of their income?
How presumptive tax for professionals works for Indian freelancers paid in foreign currency: old 44ADA, new section 58, limits, 50% income, advance tax.
InvoicingHow should an Indian freelancer handle recurring invoices to foreign clients?
How Indian freelancers handle monthly invoices to foreign clients: GST invoice timing, numbering, LUT renewal each April, monthly EDF filing and realisation.
GSTHow do you file an LUT for export of services on the GST portal?
Step-by-step guide to filing a Letter of Undertaking in FORM GST RFD-11 for export of services: eligibility, validity, late filing and the ARN on invoices.
Purpose codesWhich purpose code should a software developer or IT company use for export receipts?
Purpose codes for software and IT service exports from India: P0802, P0807, P0803, P0804, P0801 and P0902, how DGFT's IT e-BRC rules use them, and how to choose.