How should an IT services company in India receive payments from foreign clients?

IT services companies range from a small Noida firm doing QA for a Swiss insurer to a large Bengaluru company running managed services for US hospitals. A Thiruvananthapuram firm may bill time and materials monthly to a UK retailer, while a Chandigarh firm bills fixed-price milestones to a Saudi bank and runs a delivery team for its own Singapore subsidiary.

At this size the questions shift from "which app should I use" to contracts, group structure, bank processes and audit trails. This page covers those, and links to the deep guides. It is general information; confirm your position with a chartered accountant (CA).

How do international clients pay IT services companies in India?

International clients usually pay IT services companies in India against invoices on credit terms by SWIFT wire, often after vendor onboarding and a master services agreement. Smaller firms also use receiving accounts from payment providers. Large enterprise clients rarely pay by card.

• Enterprise clients: Pay by wire against monthly time-and-materials or milestone invoices.
• Group companies: A foreign parent or subsidiary pays under an intercompany agreement. See receiving payment from a foreign parent.
• Smaller clients: May pay to local account details from a payment provider.
• Vendor onboarding: US clients usually ask for Form W-8BEN-E.

For example, the UK retailer pays the Thiruvananthapuram firm's monthly invoice by wire, while the Singapore subsidiary pays the Chandigarh firm under an intercompany agreement.

Where does the money go between a foreign client and the Indian bank account of IT services companies in India?

The money from a foreign client reaches IT services companies in India through their Indian bank, the authorised dealer (AD) bank, either directly as a wire or through a payment provider that collects it first. The AD bank may credit the export proceeds only after satisfying itself that the transaction is genuine, and it updates the export entry in the Export Data Processing and Monitoring System (EDPMS) at the same time.¹⁸

• Direct wire: The client's bank sends the payment to the AD bank, which credits rupees and reports the transaction, with its purpose code, in RBI's Foreign Exchange Transaction Electronic Reporting System (FETERS).¹⁸
• Payment provider: A cross-border payment aggregator (PA-CB) collects the payment and pays it to the AD bank, and must give the AD bank the documents or information the exporter needs.²⁰
• Proof of receipt: Banks send electronic inward remittance messages (IRMs) to DGFT, and the exporter self-certifies an e-BRC against them.¹⁹

Whichever route the client uses, the AD bank is where the export is recorded, so the invoice, purpose code and EDF all meet there.

What are the ways for IT services companies in India to receive international payments?

IT services companies in India can receive international payments by SWIFT wire to an Indian bank, through local account details from a payment provider, and through PayPal, card or payment links. Each route differs in who sets the cost and what proof of receipt you get.

How does a SWIFT wire to an Indian bank work for IT services companies in India?

A SWIFT wire sends the client's payment from its bank to the Indian AD bank of IT services companies in India, which credits rupees once it is satisfied the transaction is genuine.¹⁸

• How it works: You give the client your bank's SWIFT details; the client's bank sends the payment, and your bank converts it and reports it with a purpose code.¹⁸
• Pros: No third-party account to open; the bank's IRM lets you self-certify an e-BRC on DGFT.¹⁹
• Cons: Charges and the exchange rate vary from bank to bank, so compare your bank's published charges.¹⁸
• Cost: As set in the bank's published policy, which must list charges for each process and keep them reasonable and proportional.¹⁸
• Settlement: Depends on the banks involved and is not fixed in advance.
• FIRA: Ask your bank how it issues a FIRA or e-FIRC; the e-BRC comes from its IRM data.¹⁹
• Ideal for: Enterprise clients paying monthly or milestone invoices on credit terms.

How do local account details from a payment provider work for IT services companies in India?

Local account details let a foreign client pay IT services companies in India by a domestic transfer in its own country, after which the provider converts the money and pays rupees into the Indian bank account.

• How it works: A cross-border payment aggregator (PA-CB) or similar provider collects the payment and passes the documents your AD bank needs.²⁰
• Pros: The client pays as it pays a local supplier.
• Cons: Each PA-CB transaction is capped at ₹25 lakh, and providers differ in who can sign up.²⁰
• Cost: The provider's published fee and FX markup; the calculator at the top of this page compares them.
• Settlement: The provider's published settlement time.
• FIRA: Check whether the provider issues a FIRA or e-FIRC for every payment.
• Ideal for: Smaller clients in the US, UK or Europe paying by domestic transfer.

How do PayPal, card payments and payment links work for IT services companies in India?

PayPal, card payments and payment links let a client pay IT services companies in India by card or wallet, and the provider settles rupees to the Indian bank account.

• How it works: You send a payment link or invoice; the client pays by card or PayPal balance.
• Pros: Familiar to small clients and individuals.
• Cons: Providers price card and PayPal routes separately from bank transfers, so the same invoice can cost more.
• Cost: The provider's published card or PayPal fee; see the calculator.
• Settlement: The provider's published settlement time.
• FIRA: Check what the provider issues for each payment.
• Ideal for: Small clients paying one-off support fees.

Which platforms are best for IT services companies in India?

The platforms that suit IT services companies in India depend on how their clients pay: by bank transfer, card, PayPal balance or a marketplace payout. The table lists the providers in this site's USD cost model, ordered by estimated cost on published fees, cheapest first, with providers that do not publish enough pricing to estimate listed after, A to Z.

The platform cost comparison and how to choose a payment platform apply the same criteria to every provider.

How much INR do IT services companies in India receive on $2,000, $5,000 and $10,000?

The INR that IT services companies in India receive on these three invoice sizes depends on each provider's published fees and conversion markup, and the table below works it out at today's exchange rate.

Note: A single payment through a PA-CB cannot exceed ₹25 lakh, for inward and outward transactions alike.²⁰ Check how a provider handles an invoice above that limit before you send it.

What should IT services companies in India look for beyond cost?

Beyond cost, IT services companies in India should check proof of receipt, purpose code handling, settlement time, eligibility and regulatory status, because these decide whether a payment closes cleanly with the bank and the GST return.

• FIRA: Whether the provider issues a FIRA or e-FIRC for every payment, and at what cost.
• Purpose code: Whether you can set the purpose code per payment, for example P0802 for development and P0804 for maintenance and support.⁹¹³
• Fees and FX: The fee it publishes and its FX markup over the mid-market rate.
• Settlement: How long money takes to reach your Indian account.
• Eligibility and limits: Who can sign up (individual, proprietor, partnership, company) and per-transaction limits.
• Regulatory status: Whether the provider is authorised, which you can check against RBI's payment aggregator list.

The compare hub applies the same tests to each provider.

Banks and providers also differ on their published EDF and EDPMS procedure (banks must publish the main features of their SOP and charges under regulation 19), FIRA or e-BRC data flow, forward-contract facilities, and how quickly they apply remittances to open EDFs.¹⁰ See best bank for international payments.

What compliance documents do IT services companies need?

IT services companies exporting services need an Export Declaration Form (EDF) for each month's software invoices, the right purpose code, an LUT and compliant export invoices for GST, and proof of each receipt, and they must realise each invoice within nine months.¹⁰¹¹

When is an IT services contract an export of services?

An IT services contract is an export of services when all five conditions in section 2(6) of the IGST Act are met: supplier in India, recipient outside India, place of supply outside India, payment in convertible foreign exchange (or permitted rupees), and the two not merely establishments of one person.¹ For remote development, testing and support, section 13(2) puts the place of supply at the client's location.² Exports are zero-rated under section 16.³

Which export of services traps are specific to IT companies?

• Billing your own foreign branch: A branch fails condition (v). CBIC Circular No. 161/17/2021-GST says a separately incorporated subsidiary or parent is not merely an establishment of a distinct person, so billing it can qualify.¹⁵ The 57th GST Council meeting on 8 October 2026 recommended omitting condition (v), but that needs a change in the law and was not in force as of 28 October 2026.⁷
• Subcontracting: Delivering work under a foreign IT firm's master contract is a supply on your own account, not an intermediary service, under Circular No. 159/15/2021-GST.⁶
• Intermediary arrangements: Section 13(8)(b), which put intermediary services in India, was omitted from 30 March 2026.² Earlier periods stay under the old rule. See intermediary services under GST.
• On-site work: Engineers deployed at a client site abroad, or services on equipment sent to India, can fall under special place-of-supply rules.² See place of supply for export of services.
• Indian entities of foreign clients: Invoices to a client's Indian subsidiary or global capability centre are domestic.

Registered exporters file an LUT, add the rule 46 endorsement and, above ₹5 crore of aggregate turnover, generate e-invoices.⁴⁸¹⁷ See e-invoicing for export of services.

Which RBI purpose codes fit IT services receipts?

IT services receipts usually fall in group P08 of RBI's purpose code list.⁹¹³

DGFT's mapping labels P0807 "Softex IT" and maps both P0802 and P0807 to the same IT SACs.¹⁶ RBI Circular No. 20 superseded the SOFTEX circulars from 1 October 2026,¹² and no revised descriptions have been published, so which code banks now expect for offshore delivery is unclear. Agree it with your bank and keep it consistent across e-BRCs. See P0802 vs P0807 and purpose code for software export.

What do IT companies file under the 2026 RBI rules?

IT companies file an Export Declaration Form (EDF) from 1 October 2026, replacing the SOFTEX process.¹⁰¹² Software is defined as "any computer programme, database, drawing, design, audio/video signals, any information by whatever name called" on a non-physical medium, and "services" includes software.¹⁰

1. Who receives it: For software from the Domestic Tariff Area, an AD bank or STPI; for an SEZ unit, the Development Commissioner.¹⁰
2. When: Within 30 days from the end of the month of invoicing. The payment-date option is only for non-software services.¹⁰
3. How many: One EDF can cover all of a month's export invoices.¹⁰
4. Realisation: Nine months from the invoice date, or twelve months if invoiced in rupees; the bank can extend.¹⁰¹¹

If proceeds stay unrealised more than one year after the due date, regulation 13 restricts further exports to full advance or an irrevocable letter of credit.¹⁰ Disputed invoices and write-offs need bank approval; see reduction in export invoice value and EDPMS for service exporters.

Should an IT services company register with STPI or set up in an SEZ?

STPI and SEZ are optional structures for IT companies, each with conditions. STPI is a specified authority for software EDFs from the Domestic Tariff Area, and the SEZ Development Commissioner receives EDFs from SEZ units.¹⁰ See STPI registration for software exporters and export to SEZ units, and model the choice with your CA.

What tax applies to international income for IT services companies?

IT services companies pay income tax in India on actual profits from international income. The presumptive scheme in section 58 is limited to resident individuals and firms other than LLPs, so it is not open to companies or LLPs.¹⁴

When does transfer pricing apply to an IT services company?

Transfer pricing applies when the Indian IT services company deals with an associated enterprise abroad, such as a parent that contracts with clients and subcontracts delivery to India. Section 161(1) of the Income-tax Act, 2025 requires income from such an international transaction to be determined having regard to the arm's length price.¹⁵

• GST test: A subsidiary-to-parent invoice can be an export under Circular No. 161/17/2021-GST.⁵
• Income tax test: The same invoice still needs arm's length support under section 161.¹⁵

The two tests are separate. See transfer pricing for Indian subsidiaries and receiving payment from a foreign parent.