Inward remittance for it services rendered in india
ragav
(Querist) 22 April 2012
This query is : Resolved
I am a freelancer residing in India doing IT related projects. Recently, I got an offer which asks me to do medical-records based work online. The provider(employer )is an American in US. He gives me online work and I complete it and send it through mail. The project will be for around 3-5 years or even more. The American will be paying me through wire transfer to my account in india. The payment will be around 1200 USD per month, will come every month as I continually do the project - say 1200 x 12 =15000 USD for one year.
1. Whether I need to open a current account or Savings bank account for this in any Bank in India? I have heard some banks open savings bank for salary purpose.
2. For my service charges, since my volume of work is only worth 1200 USD per month, and not a very big transaction, can I receive the pay in savings bank account by wire transfer mode. (Or) Is there a fine or penalty if I operate through Savings bank account which will be imposed by RBI or any other body for this transaction.
3. Suppose if I open a current account for inward remittance of my service charges, whether I need to produce any bills or any letter from the employer. My employer is very lazy in giving me any documents. He will just pay for the sake he has to pay and he is not interested in paper works etc. The only bill I have will be my work volume/per month that I submit to them via mail - that will look like an invoice. I will not get any approval for that, but will directly get paid from the employer.
4. While getting FIRC: While initiating wire transfer, the employer leaves the purpose of remittance in the swift note blank or some numbers. But since I have to mention the purpose for future reference, I am intending to obtain the FIRC stating the purpose as "service charges for IT related work". Is it okay to obtain this way.
5. Finally, is this okay to do this business without getting any IE code or fulfilling any other export-import formalities. (or) Do we have to do it like they do in export business? (I want to know if this falls under the export category, since I do not have any physical goods sent, I dont need a IE Code?)
Devajyoti Barman
(Expert) 22 April 2012
Your query is fit for posting in www.caclubindia.com.
Your savings account is sufficient.
Raj Kumar Makkad
(Expert) 22 April 2012
1. Saving bank Account meets the requirement.
2. No penalty is imposed.
3. Your claimed bills in consonance the payment received against them is sufficient to prove the transaction.
4. Yes.
5. IE code is mandatory as you are exporting your service.
Suhail A.Siddiqui
(Expert) 22 April 2012
without bank Account, u can not get foreign remittance against services, goods or any other purpose but it is immaterial which type account u have.You may raise electronic bill at the end of month or filling executed work and keep copy for future reference will be sufficient for service tax and Income Tax.
