The Life · Guide
Getting paid, and paying out, lawfully.
Money crossing a border while you work remotely raises two separate questions: how you legally receive what a foreign client pays you, and how you legally send money out to fund a life abroad. They run on different rules, different departments, and different documents — conflating them is where most confusion starts. This page walks both, with every figure sourced to RBI, the Income Tax Department, or CBIC directly.
Every figure above traces to RBI, the Income Tax Department, or CBIC directly — see the sources ledger for exact pages and dates.
01 — Two Different Questions
Money coming in, money going out.
Being paid by a foreign employer or client is, in regulatory terms, an export of services — it touches GST law (is it taxed, and how) and foreign-exchange rules (how the receipt is documented). Sending money abroad — rent, a deposit, savings, funding daily life while you work from elsewhere — runs on an entirely different mechanism, the Reserve Bank's Liberalised Remittance Scheme, with its own limit and its own tax collection step.
Both matter to the same person on the same trip, often in the same month, which is exactly why they get muddled. Section 02 and 03 cover receiving; sections 04 and 05 cover sending; section 06 covers the cost that touches both directions — the currency conversion itself.
02 — Receiving A Foreign Payment
Keep the proof it came from abroad.
When a foreign client pays you, the bank crediting your account documents the receipt as coming from abroad — historically via a Foreign Inward Remittance Certificate (FIRC), a term still used directly in the CGST Rules for GST refund and export claims;5 in practice today, banks more often issue an equivalent electronic advice (sometimes called a FIRA) rather than a paper FIRC, since the underlying reporting moved to an electronic system some years ago. Whichever your bank issues, keep it and link it to the specific invoice it pays — it is the paperwork that later proves a rupee credit was actually foreign-sourced income, for GST and for your own records.
Separately, foreign-exchange law sets a time limit on how long you can wait to actually receive payment for services already provided: the "realization period." As of today, that period is 9 months from the date of export, under Regulation 9 of the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015, as currently amended.3
03 — The GST Side Of Exporting Services
Zero-rated is a mechanism, not an accident.
Supplying services to a client outside India, paid in convertible foreign exchange, is treated in law as an "export of services" and, along with exports of goods, is a zero-rated supply under Section 16(1) of the IGST Act, 2017 — meaning no GST is charged on that output, while input tax credit on your own costs remains available.4
The standard, current way to actually invoice zero-rated without paying IGST upfront and claiming it back later is to file a Letter of Undertaking (LUT) via Form GST RFD-11 on the GST Portal — the portal's own guide lists "providing services to a client in a country outside India without payment of IGST" as a direct use case for it.4 None of this changes ordinary GST registration mechanics: registration still follows the standard turnover threshold once you cross it, the same as for any other service business.
04 — Sending Money Abroad
One scheme. One number: $250,000.
Under the Reserve Bank's Liberalised Remittance Scheme (LRS), a resident individual — including a minor — may freely remit up to USD 250,000 per financial year, covering permissible current and capital account transactions combined.1 The limit is per individual, not per family or per transaction — it resets each financial year, and it is your bank's authorised dealer that actually applies it when you initiate a transfer.
This is the mechanism for funding rent, deposits, and ordinary living costs abroad from India. It is separate from receiving payment for work you did — that money coming in is covered in sections 02 and 03, not this scheme.
05 — The Tax Bite On Outward Remittances
A prepayment, not a new cost.
Outward LRS remittances above ₹10 lakh in a financial year attract Tax Collected at Source (TCS) under Section 206C(1G) of the Income-tax Act, 1961 — below that threshold, no TCS applies at all.2 Above the threshold, the rate is 5% for remittances for education or medical treatment, and 20% for remittances for any other purpose — which is the bracket most living-abroad transfers fall into.2 Education remittances funded by a specified loan are fully exempt from TCS regardless of amount.2
By design, TCS collected this way is meant to be credited against your total tax liability for the year and refunded to the extent it exceeds what you actually owe — it is a prepayment mechanism, not an extra final cost on top of your tax bill. Confirm the exact reconciliation mechanics for your situation with the Income Tax Department's own pages or a chartered accountant.
TCS on outward remittances, at a glance
Section 206C(1G), Income-tax Act · current as of 25 Jul 2026
No TCS at all, for any purpose.
5% TCS on the amount above the threshold.
20% TCS on the amount above the threshold.
Exempt from TCS entirely, regardless of amount, if funded by a loan from a specified financial institution.
incometaxindia.gov.in06 — The Forex Markup, Honestly
Every rail has a margin. Compare what lands.
A wire transfer through your bank, a card network's own conversion, and a fintech remittance service are three different rails, and each applies its own margin above the mid-market exchange rate — none of them is obligated to publish that margin as a single headline number. The honest way to compare them is by what actually lands in the destination currency for a given amount sent, not by whichever fee is advertised most prominently.
One piece of this is a matter of public record rather than a shopping decision: Rule 32(2) of the CGST Rules, 2017 lets a bank or authorised dealer value its currency-conversion service, for GST purposes, on a slab — 1% of the amount converted up to ₹1 lakh (minimum ₹250); ₹1,000 + 0.5% of the amount between ₹1 lakh and ₹10 lakh; and ₹5,500 + 0.1% of the amount above ₹10 lakh, capped at ₹60,000 — with GST at 18% applied to that deemed value, not to the full amount converted.6 This is a small, mechanical line most people never separate out on a statement; it is not the same thing as the rail's own conversion margin, which varies by provider and is worth comparing directly.
07 — FAQ
Real questions, short answers.
Do I need a GST registration just to receive money from a foreign client?
Not automatically — ordinary GST registration follows the standard turnover threshold, currently ₹20 lakh for most services (lower for special-category states). Once registered, exporting services is typically zero-rated via a Letter of Undertaking rather than something that requires paying GST upfront and reclaiming it.
Is money my foreign client sends me separate from my income tax filing?
No — GST and income tax are separate systems entirely. Foreign client payments are income, taxable under the Income-tax Act regardless of GST treatment, and need to be reported in your return the same as any other income.
Does the LRS limit apply to money I earn abroad and keep in a foreign account?
The Liberalised Remittance Scheme governs what a resident individual sends abroad from India. Money already earned and held abroad is a different question, governed by its own reporting and residency rules — this is a case where the specifics of your situation matter enough to ask a chartered accountant directly rather than assume.
What is a FIRC and do I still need one?
A Foreign Inward Remittance Certificate is the document proving a payment you received came from abroad — the term itself is still used in the CGST Rules for GST refund and export claims, though in practice banks today more often issue an equivalent electronic advice. Keep whatever your bank issues, linked to the specific invoice it pays.
Can I be paid in cryptocurrency instead of through a bank?
This sits outside the banking-channel rules this page describes, and using it for genuine business payments carries its own compliance and counterparty questions that are worth specific professional advice rather than a general answer here.
Does the realization-period rule mean I lose the money if my client pays late?
No — it is a compliance timeline under foreign-exchange law, not a forfeiture clause. Late receipt is a matter to raise with your bank's trade or forex desk, or a professional, promptly — not something to ignore until it becomes a bigger problem.
08 — Sources
Where every figure on this page comes from
- Reserve Bank of India — "Liberalised Remittance Scheme" FAQ: the USD 250,000 per financial year limit for resident individuals.rbi.org.in — LRS FAQrbi.org.in · page's own revision date 6 Apr 2023 · accessed 25 Jul 2026
- Income Tax Department, Government of India — TCS rates and provisions: the ₹10 lakh threshold, 5%/20% rates under Section 206C(1G), and the loan-funded-education exemption.incometaxindia.gov.in — TCS ratesincometaxindia.gov.in · accessed 25 Jul 2026
- Reserve Bank of India — Notification FEMA 23(R)/(8)/2026-RB (5 Jun 2026), reverting the export-of-goods-and-services realization period to 9 months under Regulation 9 of the FEM (Export of Goods & Services) Regulations, 2015, after a temporary extension to 15 months in Nov 2025.rbi.org.in — Notification FEMA 23(R)/(8)/2026-RBrbi.org.in · accessed 25 Jul 2026
- Central Board of Indirect Taxes and Customs / GST Council — zero-rating of exports under Section 16(1), IGST Act 2017, and the GST Portal's own user guide to filing a Letter of Undertaking (Form GST RFD-11) for exporting services without paying IGST upfront.gstcouncil.gov.in — Zero Rating of Supplies (PDF)gstcouncil.gov.in & tutorial.gst.gov.in · accessed 25 Jul 2026
- Central Board of Indirect Taxes and Customs — Rule 89(2)(c), CGST Rules 2017, requiring a Bank Realisation Certificate or Foreign Inward Remittance Certificate for a GST refund claim on export of services.taxinformation.cbic.gov.in — CGST Rule 89taxinformation.cbic.gov.in · accessed 25 Jul 2026
- GST Council / CBIC — "Valuation in GST" flyer: Rule 32(2), CGST Rules 2017, the slab-based valuation of currency-conversion services (1% / 0.5% / 0.1%, capped at ₹60,000), the same rule already published on the AFG SaaS sibling page's GST-on-forex-markup section.gstcouncil.gov.in — Valuation in GST (PDF)gstcouncil.gov.in · accessed 25 Jul 2026
About this page: written for an individual Indian resident doing remote work for foreign clients or employers. It does not cover companies, partnership structures, or every GST edge case. Rules in this area change often and sometimes quickly — as the realization-period note above shows — verify anything material on the official RBI, Income Tax, or GST portal pages, or with a chartered accountant, before you rely on it.
The Line
Know the rules. Then go.
Nothing on this site will help you route money to dodge a limit or hide income from either tax authority. Right status, counted days, filed returns, insured health — that is the version of this life that lasts.