Working Remotely for Foreign Companies from India

More overseas companies now hire people who live in India, but 'we hire in India' can mean three very different arrangements. Each one changes who pays your tax, what benefits you get, what paperwork you keep and how much of the headline number actually reaches your bank. This guide explains the moving parts so you can ask the right questions before you sign.

The three ways a foreign company can engage you

1. Employee of the company’s own Indian entity

If the company has a registered subsidiary or branch in India, you can be hired as a normal Indian employee. You get an Indian payslip in rupees, tax is deducted at source (TDS) by the employer, and the usual statutory items such as provident fund apply. From a paperwork point of view this is the simplest option for you. It is mostly offered by larger companies that already have an Indian presence.

2. Employee through an Employer of Record (EOR)

An Employer of Record is a company that already has an Indian entity and legally employs you on behalf of the foreign company. The foreign company directs your day-to-day work; the EOR issues your employment contract, runs Indian payroll, deducts tax and handles statutory contributions. For you it looks much like a regular Indian job: rupee salary, payslips and an annual TDS certificate. Ask who your legal employer is, which benefits the EOR provides (health insurance, leave policy), and what happens if the foreign company ends the arrangement.

3. Independent contractor (freelancer or consultant)

Many companies without an Indian entity engage people as contractors. You are not an employee: you invoice the company, usually in USD, EUR or GBP, and they pay you as a supplier. Nobody deducts Indian tax for you, there is no provident fund or employer-paid insurance, and you are responsible for your own tax, advance tax payments and, if applicable, GST compliance. In exchange, contractor rates are often higher than equivalent employee salaries, and you may be able to work with more than one client.

• Who pays you: Indian entity or EOR (employee) vs the foreign company directly or via a payment platform (contractor).
• Who handles tax: employer deducts TDS (employee) vs you pay advance tax yourself (contractor).
• Benefits: statutory benefits plus whatever the employer adds (employee) vs only what you buy yourself (contractor).
• Termination: notice and protections in your employment contract (employee) vs whatever the contract says, often short notice (contractor).
• Paperwork you keep: payslips and annual TDS certificate (employee) vs invoices, contracts, bank remittance advices and your own accounts (contractor).

Questions to settle before you sign

1. Am I an employee of an Indian entity, an EOR employee, or a contractor? Which company is named on the contract?
2. What currency am I paid in, how often, and on what date? For contractors: is it monthly invoicing, and how many days after an invoice is payment due?
3. How does the money reach me: Indian payroll, bank wire, or a payment platform? Who pays the transfer fees?
4. What notice period applies on both sides?
5. Are paid leave, public holidays, health insurance or an equipment allowance included? Which country’s public holidays?
6. Who owns the work I produce, and are there restrictions on working for other clients?
7. What hours of overlap with the team are expected, in IST?

How international payments reach your Indian bank

If you are paid through an Indian entity or an EOR, your salary arrives like any domestic salary, in rupees. As a contractor, the money crosses a border, and that creates a few extra steps you should understand.

The common routes

• Direct bank wire (often over the SWIFT network): the client sends foreign currency to your Indian bank, which converts it to rupees and credits your account. Intermediary banks along the way may deduct their own charges.
• Cross-border payment services and platforms: the client pays the platform in their currency, and the platform pays you in rupees in India. Fees and exchange rates vary widely between services.
• Freelance marketplaces: the marketplace collects from the client and pays you out, usually after deducting a service fee.

The Reserve Bank of India (RBI) brings entities that process cross-border payments for the import and export of goods and services online under direct regulation, as 'Payment Aggregator – Cross Border'. Before you rely on any service for regular income, read its fee page and terms, and check that it is a regulated bank or an RBI-authorised entity for this purpose.

Purpose codes

Every inward foreign remittance into India is reported with an RBI 'purpose code' that describes why the money came in. There are separate codes for different kinds of service exports (for example software services, consulting, design or advertising services), and different ones for gifts or family maintenance. Your bank or payment service will ask you to choose or confirm a code. Pick the one that honestly describes your work: a wrong code can delay credit and causes confusion later when you need to show the income was payment for exported services.

Remittance advices and certificates

For each inward payment, banks and payment services issue a document confirming the remittance: the amount, currency, exchange rate, sender and purpose. Names vary between providers: you will see terms such as FIRA or e-FIRA (Foreign Inward Remittance Advice), BIRC, or e-FIRC. Download and keep every one of these alongside the matching invoice. They are your evidence that the payment was export income received in foreign exchange, which matters for GST (see below), for your CA, and sometimes for loan applications.

What a transfer really costs

The headline fee is only part of the cost. Most services also convert at a rate below the mid-market rate you see on a currency website, and the difference (the FX spread or markup) is a fee too. Intermediary banks on a wire may take a fixed amount off before the money arrives. The only reliable comparison is this: divide the rupees that actually landed in your account by the amount of foreign currency the client sent. That is your effective rate. Track it for a few payments and compare it with the mid-market rate on the same day.

Tax basics: the big picture

India’s Income-tax Act, 2025 came into force on 1 April 2026 and replaced the Income-tax Act, 1961. The Central Board of Direct Taxes has described it as a simplification of language and structure rather than a change in tax policy, but almost every section number has changed. Many articles online still quote the old sections, such as 44ADA for professionals. Income earned up to 31 March 2026 is generally dealt with under the old Act, and income from the 2026-27 tax year onward under the new one. The new Act also uses the term 'tax year' in place of the old 'previous year' and 'assessment year' pair.

Your foreign income is taxable in India if you are resident

If you are resident in India for tax purposes, your worldwide income is taxable in India. Being paid by a foreign company, in dollars, into a foreign platform first, does not change that. Residency depends on how many days you spend in India and a few other conditions; most people who live and work in India full time are resident. If tax was withheld in the client’s country, you may be able to claim credit for it in India under the rules for relief from double taxation. Keep the foreign tax documents and ask your CA.

Employees: TDS usually covers it

If you are employed through an Indian entity or an EOR, your employer deducts tax from your salary every month, and you file your return using the TDS certificate they give you. If a foreign employer pays you directly without Indian payroll, nobody is deducting tax, and you need to handle it yourself through advance tax.

Contractors: advance tax

Under the new Act, advance tax applies when the tax you expect to owe for the year is ₹10,000 or more. The general schedule has four instalments: at least 15% of the year’s advance tax by 15 June, 45% by 15 September, 75% by 15 December and the full amount by 15 March. Missing instalments leads to interest. Contractors often get caught out in their first year because nobody reminds them. Set money aside from every payment you receive.

Presumptive taxation for professionals

The scheme many freelancers knew as section 44ADA has been carried into section 58 of the Income-tax Act, 2025, which combines the old presumptive schemes into one section. For professionals, it lets an eligible person declare 50% of gross receipts (or more, if actual profit is higher) as income, instead of maintaining full books and claiming expenses one by one.

• Who can use it: an individual or a firm (other than a limited liability partnership) that is resident in India.
• Which work: a 'specified profession', defined in section 62(4) of the new Act. It lists legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology and company secretary work, plus any other profession notified by the CBDT.
• Receipts limit: gross receipts up to ₹50 lakh in the tax year, or up to ₹75 lakh if cash receipts are not more than 5% of gross receipts. Cheques or drafts that are not account-payee count as cash for this test.
• Advance tax: people using the scheme pay the whole of their advance tax by 15 March, instead of in four instalments.
• If you declare less than the presumptive amount and your income is above the basic exemption limit, you must keep books of account and have them audited.

Whether your particular work counts as a specified profession is a judgement call. A software developer working for a foreign client will often fit within information technology or technical consultancy; a writer, translator, illustrator or marketer may not. Ask your CA before you assume the scheme applies to you.

GST on exported services

GST can apply to contractors even when every client is abroad. Under the CGST Act, a supplier of services generally has to register when aggregate turnover in a financial year exceeds ₹20 lakh, or ₹10 lakh in some special category States. Aggregate turnover includes exports. Whether you need to register below that limit when you only export services is a point to confirm with your CA.

A supply counts as an 'export of services' under the IGST Act only when all of these hold: you are located in India, the client is located outside India, the place of supply is outside India, you are paid in convertible foreign exchange (or in rupees where RBI permits), and you and the client are not merely establishments of the same person. Exports that meet these conditions are 'zero-rated'.

To export services without paying IGST up front, a registered person furnishes a Letter of Undertaking (LUT) in Form GST RFD-11 on the GST portal, for each financial year, before making the supplies. The alternative is to pay IGST on the export and then claim a refund. Place-of-supply rules for some kinds of services are not straightforward, and the law on intermediary services was amended in 2026. If you act as an agent, broker or middleman rather than delivering the service yourself, get specific advice.

A simple paperwork routine for contractors

1. Use a written contract or statement of work for every client, stating the rate, currency, payment terms and who pays transfer fees.
2. Issue a numbered invoice for every payment, with your PAN, and your GSTIN and LUT reference if you are registered.
3. Download the remittance advice for each payment as soon as it lands, and file it with the invoice.
4. Move a fixed share of every payment into a separate account for tax.
5. Put the advance tax dates in your calendar: 15 June, 15 September, 15 December and 15 March.
6. Meet a CA before the end of your first year as a contractor, not after it.

When you browse roles on TrueJobs, listings marked India Eligible are ones where the employer has said people based in India can apply. Read the listing to see whether the role is employment or a contract.