India taxes individuals based on a system of income slabs. Different tax rates are assigned to different ranges of income.&nbsp;

Understanding tax slabs is crucial for several reasons.

As a person earns more, the tax liability also increases, creating a fair and progressive tax system in the country. To achieve this, the government regularly updates and announces changes to tax slabs in the Union Budget.

The income tax slabs differ between the old and new tax regimes. Let's explore the specific slab rates applicable to Individuals for FY 2022-23 (AY 2023-24) and FY 2023-24 (AY 2024-25).

Income Tax Slab Rates For FY 2023-24 (AY 2024-25)&nbsp;

Rates of the old tax regime slabs are categorized into three groups:

The new tax regime applies uniform tax rates to all individuals, eliminating the age-based distinctions in the old system. The new tax regime slabs 2023-24 are outlined below.

Applicability of Surcharge for FY 2023-24 (AY 2024-25)

The income tax <a href="https://incometaxindia.gov.in/charts%20%20tables/tax%20rates.htm">surcharge</a> is an extra fee imposed on top of the <a href="https://www.skydo.com/blog/how-to-file-taxes-under-44ada?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">regular income tax</a>. An additional tax is applied to individuals with higher income earnings in a specific financial year. Let’s look at the applicable surcharge rate under the Old and New tax regime.

However, 25% or 37% surcharge rates will not apply to income under the following sections.

Consequently, the highest surcharge rate on the tax payable for such incomes will be 15%.

Starting from the Assessment Year 2023-24, the maximum surcharge rate on tax payable for dividend income or capital gain specified in Section 112 will be capped at 15%.&nbsp;

A 4% Health and Education cess will be applied to all cases’ total income tax liability and surcharges.

Comparison of tax rates under the New tax regime and the Old tax regime for FY 2022-23 (AY 2023-24)

How do you calculate the income tax from the income tax slabs?

Let’s understand the calculation with an example.

Sanjana, aged 35, has a total taxable income of Rs. 8,50,000. She has opted for the old tax regime. Her income includes income from salary, interest and rental income. Deductions under section 80 have been reduced. Now, Sanjana wants to know her <a href="https://www.skydo.com/blog/gst-requirements-international-service-sales?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">tax liability</a> for FY 2022-23 (AY 2023-24).

*Sanjana, an individual taxpayer under the age of 60, enjoys an income exemption limit of up to Rs 2,50,000. Other taxpayers, i.e., senior and super senior citizens, have higher income tax exemption thresholds of Rs 3,00,000 and Rs 5,00,000, respectively.

Please be aware that the tax rates in the New Tax Regime are uniform for all categories of individuals, including regular individuals, senior citizens, and super senior citizens.&nbsp;

Individuals with a net taxable income of up to Rs 5 lakh qualify for a tax rebate under section 87A, resulting in zero tax liability in both the New and Old tax regimes. It's important to note that in Budget 2023, the rebate under the new regime has been extended, making income up to Rs 7 lakh tax-free from the FY 2023-24 onward.

Let's delve into effective strategies to maximize your investments while minimizing the associated tax burdens.

ELSS mutual funds provide a dual benefit of potential capital appreciation and tax savings under Section 80C of the Income Tax Act. Investing in ELSS reduces taxable income and offers a path for long-term wealth growth.

2. Explore tax-efficient investment avenues

Health insurance qualifies for tax benefits under Section 80D. You can claim tax benefits on premiums paid - up to Rs 20,000 for senior citizens and Rs 15,000 for others. For example, if you pay Rs 15,000 for your policy and Rs 20,000 for your senior citizen parent, you can claim a total tax benefit of Rs 35,000.&nbsp;

Maturity value is tax-free for sums received under critical illness insurance policies.

This strategy entails selling loss-making assets to realize the capital loss and using it to offset the gains earned by profit-making assets.

For instance, if you have a loss of Rs. 20,000 in Stock A and a gain of Rs. 30,000 from Stock B, you can sell Stock A during a market downturn to offset the gains. This way, you can reduce your taxable income. The saved amount can be reinvested for portfolio growth.

Ensure that tax loss harvesting aligns with your overall financial goals and plan by considering a discussion with a financial professional or tax advisor.

<a href="https://www.skydo.com/blog/how-can-the-right-chartered-accountant-help-your-tech-export-business?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Consult financial professionals or tax advisors</a> for effective tax planning and strategic advice. Their expertise can provide tailored insights aligned with your financial goals and ensure a well-informed approach to optimize your tax situation.

If you need help deciding what is right for you, we will connect you with our panel of Indian and US-based CA / CPAs. Feel free to reach out to us.

Q1. How is a taxpayer's income categorized?

Ans: A taxpayer's income falls into five categories outlined in Section 14 of the Income Tax Act. These include Income from salary, Profits from a business or profession, Income from House Property, Capital Gains, and Income from Other Sources.

Q2. Is it possible to avail of 80C deductions while choosing the new tax slabs 2023-24?

Ans: No, under the new tax regime, several deductions and exemptions, including those under section 80C, are not permitted. Opting for the new tax regime means foregoing the ability to claim deductions under section 80C.

Q3. What do "Previous Year" and "Assessment Year" mean?

Ans: We have two important terms in income tax provisions: (i) Previous Year and (ii) Assessment Year. Previous Year is when you earn income, typically from April 1st to March 31st. The year right after the Previous Year, from April 1st to March 31st, is called the 'Assessment Year.'

For example, the Previous Year is from April 1, 2023, to March 31, 2024 (FY 2023-24). The corresponding Assessment Year is from April 1, 2024, to March 31, 2025 (AY 2024-25).

Q4. What is the tax exemption limit for calculating income tax rebate under section 87A?

Ans: For FY 2023-24 (AY 2024-25), the rebate limit has been increased to Rs. 7,00,000 under the new tax regime. This means a resident individual with taxable income up to Rs 7,00,000 will receive Rs 25,000 or the amount of tax payable (whichever is lower) as tax relief. However, the old tax regime's threshold limit will remain the same, i.e., Rs 12,500 if taxable income is up to Rs 5,00,000.

Q5. How much is the standard deduction for FY 2023-24?

Ans: You can claim a standard deduction of ₹50,000 to the income taxable under the head ‘Salaries.’ The standard deduction is a tax benefit that can be claimed irrespective of the amount spent on Transport or Medical Allowance. It applies to individuals earning a salary or pension income.

Prepare for the upcoming year's tax season by understanding the tax slabs for 2023-24 and optimizing your tax savings. 

Tax Slabs in 2023-24: Plan Ahead for Next Year Tax Savings

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Rohit Khuranna

Are you a freelancer, an exporter, or someone receiving personal transfers from abroad? If yes, you’ve probably wondered: Can I receive money from abroad directly into my Indian bank account? The good news is, yes, you can—but it’s not always as straightforward as it sounds.

In this blog, we’ll break it all down receiving money from abroad in India. From the process, to the key factors you need to consider (like fees and conversion rates), we’ll also explore if there’s a smarter way to handle cross-border transfers. Let’s get started!

Can I receive money from abroad in my bank account in India?

The short answer? Absolutely! Indian citizens can receive foreign remittances directly into their savings bank accounts without restrictions, except under the <a href="https://jhpolice.gov.in/sites/default/files/ForeignContributionRegulationAct_1976.pdf">Foreign Contribution Regulation Act, 1976.</a>&nbsp;

Most international transfers today use the <a href="https://www.skydo.com/blog/swift-money-transfer-ultimate-guide">SWIFT network</a>. Here’s how it works: the sender initiates an <a href="https://www.skydo.com/blog/international-wire-transfer-all-you-need-to-know">international wire transfer</a> through their bank, providing your name, account number, and <a href="https://www.skydo.com/swift-code-finder">SWIFT code</a>. Once processed, you’ll typically see the funds in your account within 5 business days.

Banks have long been the go-to option for receiving money from abroad. But with growing demand for faster, cheaper, and more convenient alternatives, platforms like Skydo, <a href="ttps://www.skydo.com/blog/transferwise-india-features-benefits-pros-cons">Wise</a>, and <a href="https://www.skydo.com/blog/payoneer-payment-gateway-features-fees">Payoneer</a> are becoming increasingly popular for receiving money from abroad in India. They offer international virtual accounts and simplified processes, which we’ll dive into later in this blog.

Should I Use My Savings Accounts to Receive Money from Abroad in India?&nbsp;&nbsp;

Yes, you can use your savings account to receive money from abroad. Under the foreign remittance scheme, there are no restrictions on the number of transfers or the amount, e<a href="https://www.skydo.com/blog/compliance-guideline-for-inward-remittance">xcept for trade-related transactions, which have a cap of ₹15 lakh.</a>

But here’s where it gets tricky—if you’re receiving both <a href="https://www.skydo.com/blog/how-to-receive-international-payments-in-india">business payments</a> and personal transfers in the same account, things can get messy.

In India, income earned through business activities is taxable under the Income Tax Act. Mixing personal and business transactions in a single account can complicate tax reporting, making it harder to calculate business income and deductions accurately.

Additionally, businesses are required to file income tax returns, <a href="https://www.skydo.com/blog/gst-requirements-international-service-sale">GST returns,</a> and other financial statements. Using your savings account for business funds can create challenges in maintaining accurate records, potentially leading to compliance issues or penalties for errors.

To keep things smooth and stress-free, it’s often better to separate personal and business transactions. Platforms like Skydo offer dedicated virtual international accounts that can help you manage business payments more efficiently—saving you time, money, and unnecessary headaches.

Receiving Money From India via Banks: Step-by-Step Guide

Here is the detailed process for receiving money from abroad in India into your savings bank account.

Step 1: Provide Your Bank Account Information

Provide the sender with all the bank account information, such as your bank name, account number, branch name, SWIFT code, and <a href="https://www.skydo.com/blog/iban-number-meaning-full-form">IBAN </a>(if applicable).&nbsp;

Wait for the sender to initiate the fund transfer and send you a payment confirmation with the reference number and the expected amount.&nbsp;

International wire transfers via SWIFT may take up to 5 days to credit the money in your bank account. Ensure you get a credit confirmation for the funds, which you can communicate with the sender.&nbsp;

Step 4: Foreign Inward Remittance Advice (FIRA)

If you are receiving an international payment, you need to obtain <a href="https://www.skydo.com/blog/all-you-need-to-know-about-firc-a-complete-guide">FIRA </a>from your bank for the same. It is a document issued by banks as proof of receiving international payments.&nbsp;To get your FIRA, you’ll need to contact your bank directly. However, most banks charge a fee for issuing this document, which can add to your costs.

Things to Note while Receiving Money from Abroad in India via Banks:&nbsp;

Banks are often the default choice for receiving money from abroad in India. However, if you are receiving international payments via banks, here are a few things you should consider:&nbsp;

International Virtual Bank Accounts with Skydo: An Alternate Way to Receive Payments from Abroad in India

Given these factors, a lot of exporters and freelancers are looking at alternatives like international virtual accounts to receive their payments from abroad in India.&nbsp; Skydo for example,&nbsp;provides users with virtual bank accounts in countries like the US, UK, and Australia. Clients in these countries can send payments to these virtual accounts as local transfers, avoiding the hassle and cost of international transfers. Skydo then consolidates these local payments and transfers them to the recipient’s personal bank account in about 24 hours.&nbsp;

In terms of fees, since there are no&nbsp;SWIFT transfers,&nbsp;no SWIFT fees apply. Skydo simply charges a flat rate of USD 19 for payments under $2,000 and USD 29 for payments between USD 2,001 to USD 10,000. And most, importantly it offers live exchange rates with no markup or hidden fees. Meaning if the current exchange rate is INR 84 for 1 USD, that is exactly what you will get.&nbsp;

And not just that, Skydo also offers instant FIRA for every international payment absolutely free of cost. Make the smart move with Skydo—receive money from abroad effortlessly, affordably, and without hidden fees

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Receiving money from abroad in India

For freelancers, timely and accurate GST filing is non-negotiable. Failure to comply can result in hefty penalties. With two filing frequencies—monthly or quarterly—ensuring you file them during these set durations is crucial.&nbsp;

This blog simplifies GST for freelancers, covering registration, filing returns, and staying compliant.

Under GST regulations, mandatory registration is necessary in the following scenarios.

In 2019, the Union government introduced the <a href="https://tutorial.gst.gov.in/userguide/compositionpoc/optforcomposition.htm">composition scheme</a>, offering freelancers earning less than Rs. 50 lakhs annually to pay GST at a reduced rate. Under this scheme, freelancers must pay a combined GST rate of 6% every quarter, with 3% allocated for CGST and 3% for SGST.

To verify your existing GST registration status, follow these steps.

Monthly vs. Quarterly Filing: Which one should you choose?

Consider the following factors to choose between monthly and quarterly GST filing.

GSTR-1 is a monthly or quarterly return that contains details of outward supplies of goods or services. It is a summary of all sales transactions made by a taxpayer during a specific period.

Timely and accurate filing of GSTR-1 is crucial to claim <a href="https://www.skydo.com/blog/how-to-claim-input-tax-credit-refund-in-india?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">Input Tax Credit (ITC)</a> and for reconciliation purposes.

For freelancers who opt for monthly filing, you need to file GSTR-1 every month, generally by the 11th of the next month. If you choose quarterly filing, you must submit GSTR-1 once every quarter, typically by the 13th of the month following the end of the quarter.

GSTR-3B is a self-declared summary GST return filed every month (quarterly for the QRMP scheme). You need to report the summary figures of sales, ITC claimed, and net tax payable in GSTR-3B.

The due date for the monthly filers is the 20th day of the next month, whereas, for quarterly GST returns, it is either the 22nd or the 24th day of the month following the quarter, depending on the state or union territory of the place of business.&nbsp;

Late filing will lead to accumulating interest and penalties. Therefore, choose wisely.

Collect all relevant documents, such as invoices, bills, and bank statements, that will be required for filing GST returns.

#2: Log In to the <a href="https://selfservice.gstsystem.in/">GST Portal</a>

Visit the official GST portal and log in using your credentials.

#3: File GSTR-1 (Outward Supplies Details)

#4: Reconcile and Finalise GSTR- 2A (Auto-populated Supplier Details)

#6: Make Online GST Payments Based on GSTR-3B

After filing GSTR-3B, make online GST payments using the available payment options on the GST portal. Ensure timely payment of tax liabilities to avoid penalties and interest charges.

Staying GST compliant is paramount for freelancers to avoid penalties and maintain financial health. If you need more clarification, it's wise to seek personalised advice from a <a href="https://www.skydo.com/blog/chartered-accountants-approve-skydo-for-seamless-gst-refunds?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">tax professional</a>.

The GST portal is your go-to resource for more help navigating GST for freelancers. It's packed with handy tools, guidelines, and updates to keep you on track with GST regulations.&nbsp;

If you're eager to dive deeper into tax filing strategies tailored for freelancers, don't forget to explore our <a href="https://www.skydo.com/blog/how-to-file-taxes-under-44ada?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">blog.</a>&nbsp;

Q1. Do I need to pay advance tax if my GST liability is high?

Ans: There is no provision for paying advance tax in case of higher GST liability.

Q2. What are the benefits of opting for the Composition Scheme?

Ans: Benefits of opting for the composition scheme:

Q3. What documents do I need to keep for GST filing?

Ans: Documents Required for GST Filing include:

Q4. What are the different types of GST returns I need to file?

Ans: Here are the main types of GST returns you might need to file.

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Today, everything from hailing a ride to shopping for groceries or signing up for classes happens online. But behind this convenience lies a crucial need: making sure money moves smoothly behind the scenes.

That's where the <a href="https://www.skydo.com/blog/what-are-capital-and-current-account-transactions">Current Account</a> comes in. It's the protagonist in your business's financial story, making everyday transactions easy. However, it's not alone—special accounts like Nodal and Escrow accounts also play significant roles, handling the tricky money transfers that come with doing business online.

The blog covers the functions, advantages and framework for nodal, escrow, and current accounts. It will help you to choose the right tool to improve your financial management and ensure compliance.

Nodal accounts, mandated by the RBI, are specialised bank accounts tailored for businesses functioning as intermediaries in the online space. Its purpose is to safeguard the interests of customers and vendors, ensuring that payments are efficiently collected, processed, and disbursed to relevant vendors without unnecessary delays.

How Nodal Accounts Facilitate Fund Transfers

Nodal accounts act as temporary vaults, ensuring collected <a href="https://www.skydo.com/blog/choose-international-payment-gateway-2024">payments are processed promptly</a> and payouts to relevant stakeholders occur without delays. For example, when a customer pays for a product online, the nodal account handles payouts to the seller and manages funds for shipping partners and payment processors.

Industries and Scenarios Where Nodal Accounts are Commonly Used

Nodal accounts are popular in industries with complex interactions between customers, vendors, and payment gateways. It includes the following business categories.

From the Middle Ages, escrow means a deposit of trust or security. In modern times, an escrow account is a temporary financial vault managed by a trusted third party, securing funds on behalf of two parties bound by a contract.&nbsp;

The key characteristics of an escrow account are as follows.

Escrow accounts are common in business transactions, especially in real estate and online transactions. In real estate, a buyer deposits the total house value into an escrow account, with staged payments tied to project completion levels. For instance, 10% may be due upon laying the foundation.&nbsp;

Escrow is indispensable in unknown buyer-seller scenarios such as second-hand purchases. Serving as buyer protection, it ensures fund release only upon satisfactory product receipt, minimising disputes or chargebacks for the seller.&nbsp;

In an e-commerce transaction, the customer initiates a purchase and submits payment. When the funds reach the escrow account, the intermediary prompts the seller to dispatch the goods. Following shipment, the buyer receives the goods and verifies their satisfaction, confirming it to the intermediary.&nbsp;

Upon this confirmation, the intermediary transfers the funds from the escrow account to the buyer, completing the secure transaction process. The intermediary usually charges a fee to facilitate the transaction.&nbsp;

Legal and Regulatory Aspects of Escrow Accounts

Escrow agreements involving a buyer, seller, and escrow agent are contractual arrangements outlining terms for escrow payments. In India, specific transactions are legally bound to employ escrow accounts, emphasising the need for businesses to understand applicable laws.&nbsp;

These stringent regulations aim to protect the interests of all parties involved in escrow transactions in India.

Pros of Using Escrow Accounts for Business Operations

Cons of Using Escrow Accounts for Business Operations

A <a href="https://www.skydo.com/blog/what-is-a-zero-balance-current-account?utm_source=blogs&amp;utm_medium=website&amp;utm_campaign=post_link">current account</a> is a financial account that allows deposits, withdrawals, and daily transactions. It serves as a gateway for managing day-to-day financial activities, offering easy access to funds.

Features of Current Accounts for Businesses

Nodal and Escrow accounts share the principle of involving a third party for fund holding and settlements.

In contrast, the Current Account follows a different approach by channelling all payments through a single account. It is common for businesses to support online and offline transactions with no upper limit on daily transactions.&nbsp;

Considerations for Choosing a Current Account Provid

When to Use Nodal, Escrow, or Current Accounts

Choosing between Nodal, Escrow, or Current Accounts depends on a business's specific financial needs and operations. Each account type serves distinct purposes, addressing unique requirements in fund management and transactions.&nbsp;

Examples of businesses that benefit from these three types of accounts

Scenarios Where Escrow Accounts Are the Ideal Choice

In specific scenarios, opting for an escrow account is strategically sound, addressing various industries and transactions.

Advantages of Current Accounts in Specific Business Contexts

Overview of regulations governing nodal accounts

The Reserve Bank of India (RBI) issues guidelines to regulate nodal accounts that primarily focus on ensuring the security, transparency, and efficiency of payments within marketplace ecosystems. Here are some key aspects.

Compliance Requirements for Businesses Using Escrow Accounts

Regulatory framework for current accounts and its impact on businesses

The regulatory framework for current accounts encompasses various aspects impacting businesses. Below are some examples.

Factors to Consider When Choosing The Right Account Type

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For exporters, eBRC (Electronic Bank Realization Certificate) is a key compliance document that serves as proof of payment received from abroad for exported goods or services. It is especially important for goods and software exporters covered under SOFTEX.

In this blog, we’ll break down what eBRC is, why it matters, how to obtain it, and everything else you need to know.

An eBRC (Electronic Bank Realization Certificate) is digital proof that your bank issues once you receive payment for an export. Simply put, it confirms that you’ve been paid for your goods or services.

This certificate is important because it helps you report your earnings, file taxes easily, and even access government benefits meant for exporters including low-cost loans, subsidies, duty exemptions and more.&nbsp;Since eBRC includes all the transaction details, it also makes compliance with authorities like the Income Tax Department smooth and hassle-free.

Before eBRC, getting a <a href="https://www.skydo.com/blog/bank-realisation-certificate-all-you-need-to-know">Bank Realization Certificate (BRC)</a> was a tedious process. Exporters had to visit their bank, apply for a physical BRC, and then submit it to the Directorate General of Foreign Trade (DGFT). The DGFT would manually enter transaction details, making the process slow and complicated—especially for claiming export incentives.

In 2012, the DGFT introduced e`BRC, eliminating the need for physical visits and paperwork. Now, banks issue BRCs digitally, making it faster, easier, and more efficient for exporters to claim benefits and comply with regulations.

In India, banks issue an -BRC to exporters through the following process.

How do you check the eBRC status on the DGFT Website?

Here are the steps to check the status of your eBRC (Electronic Bank Realization Certificate) online.

DGFT has made it mandatory for all exporters to apply for and receive the eBRC to demonstrate that they have received payment for their exported goods or services per DGFT regulations.

The eBRC system provides a digital record of export transactions, making it easier for exporters to maintain and retrieve records for audit and compliance.  Additionally, exporters can avoid visiting the bank and DGFT offices.&nbsp;

One of the main reasons exporters apply for the eBRC is to reap the benefits of various export benefits offered by the Indian government under its Foreign Trade Policy. Submitting an eBRC allows the exporters to be eligible for benefits such as low-cost loans, duty exemptions, subsidies, etc.&nbsp;

Enhancing transparency and accountability

The Indian government and authorities such as the Income Tax Department and the DGFT constantly monitor and manage the country's foreign exchange reserves and tax filing. Issuing e-BRC ensures that the foreign exchange earned through exports is accurately reported and accounted for with effective tax filing.&nbsp;

How to Claim Export Incentives using eBRC

In India, the DGFT decides on the value of the incentives which an exporter can seek under the various export benefits. The value is decided by analysing the Free on Board (FOB) of the exported goods and services mentioned in the shipping bills, and the total received payments per the eBRC.&nbsp;

Here's how you can claim these benefits with eBRC:

However, you must ensure that the bank has submitted an error-free e-BRC and it reflects the consolidated realisation value. Furthermore, you must enter freight values, insurance and commission values in the refund application, as the e-BRC excludes such values.&nbsp;

Here are some key resources and tools that can help you in your endeavour to obtain your e-BRC.

eBRC is a crucial certificate issued by the bank and verified by the DGFT for streamlining the payment procedure for exporters and working as an income proof for better transparency and tax filing.&nbsp;

It is mandatory for an exporter receiving payments for the export of goods and services to apply for eBRC and ensure that the bank uploads it on the DGFT website. Utilising the eBRC, exports can present their eligibility for various export incentives and increase their profit margin.&nbsp;

However, as an exporter, you must maintain accurate records of your export transactions and related documents to facilitate the e-BRC application process. Since the regulations and the procedure may change over time, it's important to stay updated with the latest information from official government sources and industry associations.&nbsp;

You can contact <a href="mailto:support@skydo.com">industry experts at Skydo</a> to help you with the eBRC process and in case you have any other queries related to foreign exchange.&nbsp;

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Doing business globally has never been easier, until it’s time to get paid.

If you're an exporter, freelancer, or SaaS founder in India, you probably know the struggle. You finish a project or ship a product overseas… and then begins the long wait. Between delays, surprise deductions, poor exchange rates, and a ton of paperwork, getting your money from international clients can feel like a second job.

That’s where virtual bank accounts come in,&nbsp; and they’re changing the game.

Think of them as local bank accounts in the countries you do business in, without needing to actually open one abroad. You get paid like a local, skip the heavy banking charges, and see your money land in your Indian account faster and in full.

Let’s make international payments one less thing to worry about.

A virtual bank account is like a digital address for your international payments. It’s not a physical account you walk into, instead, it’s a unique account number (usually 18 digits) linked to your real Indian bank account.

When your overseas client pays you through this virtual account, the money is instantly routed to your actual bank account, without you needing to open a bank account in that country.

Now, here's the key difference:
Virtual accounts don’t hold money; they just receive and forward it. Think of them as smart couriers that collect funds and drop them directly into your home bank, minus the usual chaos of SWIFT delays or form-filling marathons.

So why are exporters and freelancers making the switch?

You don’t have to share your actual bank account details with clients. That’s one less exposure point.&nbsp;

Working with clients across the US, UK, EU, and beyond? You can set up a virtual account for each region. That means payments in different currencies, all tagged to the right client, making reconciliation smooth and stress-free.

At their core, virtual bank accounts are like “mirrors” of real bank accounts. They don’t actually hold funds, but act as smart collection tools designed to receive money, identify where it came from, and route it to your primary bank account.

Let’s break that down with a simple example:

Say you're an Indian freelancer working with clients in the US, UK, and Singapore. Instead of asking them to make an international wire transfer to your Indian bank account (which can take days and involve hefty fees), you generate a virtual account in each client’s region.

So when your US client sends you $1,000 to your US virtual account, they’re doing a local transfer, just like they would to a US-based vendor. That money is received by your virtual USD account, converted into INR, and credited to your Indian bank account, all behind the scenes.