RBI Purpose Code for Inward Remittance: Essential Guide
At a Glance
- What it is: An RBI-mandated code that states why money is coming into India (salary, export proceeds, services, gifts, etc.). Banks must report each inward transfer with a valid code under FEMA.
- Why it matters: The right code = faster credits, correct compliance records (FIRC/evidence), fewer bank queries. Wrong codes trigger delays or returns.
- Where to find codes: RBI’s official Annexure II list (receipt codes start with P). Many banks/fintechs also publish human-readable lists.
- Quick tip: Decide the purpose → pick the closest P-code → tell your sender before they initiate the transfer (their bank often captures the code at setup)
What is an RBI Purpose Code?
An RBI purpose code is a standardised, alphanumeric label that classifies the reason for a foreign inward remittance (e.g., P1401 salary, P0102 export realisation, P0802 software services). AD banks must capture and report it to the RBI for every incoming transfer under FEMA reporting.
Why the right RBI purpose code is critical (inward remittance)
Picking the correct RBI purpose code for inward remittance isn’t a formality; it directly affects compliance, speed of credit, and your documentation trail.
1) It’s a regulatory must-have (FEMA/RBI). Authorised Dealer (AD) banks must capture and report every foreign inward transaction to RBI with a valid receipt (“P”) purpose code under FETERS. If the code is missing/wrong, banks can’t file accurate returns, triggering holds or rework.
2) It keeps your paperwork clean (FIRC/evidence). The purpose you declare flows into your compliance evidence (e.g., FIRC details and audit trails). Declaring the accurate code up front helps your bank issue the right certificate without back-and-forth.
3) It prevents delays, manual reviews, and returns. A vague or incorrect purpose (e.g., tagging a service payment as goods realisation) often triggers manual checks, queries, or even a return to sender until corrected.
4) It improves accounting clarity and BoP classification. Purpose codes classify inflows (e.g., P01 goods exports, P08 computer & information services, P10 other business services, P13 transfers, P14 income), allowing clean bookkeeping and accurate national statistics—another reason banks insist on precise coding.
5) It reduces compliance risk later. If you repeatedly misclassify remittances, you create inconsistencies between invoices/contracts and RBI filings—raising the odds of additional questions or penalties under FEMA. Industry guidance stresses getting the code right at the remitter setup stage (sender’s bank/platform usually captures it) to avoid re-papering.
Pro tip (implementation):
- Share the exact P-code with your payer before they initiate the transfer (many platforms capture the purpose during setup).
- Keep supporting docs handy (invoice/contract/SoW, employment letter for salary, gift note for family inflows) in case your bank requests validation.
- If you spot a mistake, ask your bank to rectify the purpose immediately with a short declaration + proof, to unblock credit and keep your FIRC clean.
How to pick the correct code (step-by-step)
- Identify the nature of funds (salary, family support, goods export, IT/consulting services, commission, dividends, refunds).
- Map to RBI’s receipt groups:
P01 Exports (goods)
P08 Computer & information services (e.g., software)
P10 Other business services (consulting, accounting, legal, etc.)
P13 Transfers (family maintenance, gifts)
P14 Income (salary, dividends, profit repatriation)
P15 Others (refunds/rebates, etc.)
- Share the code with your sender so their bank/remittance form records it correctly (often in SWIFT narrative fields)
- Keep proofs ready (invoice/contract/letter), in case the bank asks to validate the declared purpose.
Find the right purpose code for inward remittance with Skydo
Our purpose code finder is your shortcut to identifying the correct purpose code for inward remittance and explaining when to use it. You can either search for the activity to find the relevant purpose code or directly look up the specific purpose code for a simple explanation of when to use it.
| Code | Category(as per RBI) | Description(as per RBI) | When to use? |
|---|---|---|---|
P0017 | Capital Account | Receipts on account of Sale of non-produced non-financial assets (Sale of intangible assets like patents, copyrights, trademarks etc., land acquired by government, use of natural resources) -Government |
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P0019 | Capital Account | Receipts on account of Sale of non-produced non-financial assets (Sale of intangible assets like patents, copyrights, trademarks etc., use of natural resources) - Non-Government |
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P0101 | Exports (of Goods) | Value of export bills negotiated / purchased/discounted etc. (covered under GR/PP/SOFTEX/EC copy of shipping bills etc.) |
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P0102 | Exports (of Goods) | Realisation of export bills (in respect of goods) sent on collection (full invoice value) |
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P0103 | Exports (of Goods) | Advance receipts against export contracts (export of goods only) |
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P0108 | Exports (of Goods) | Goods sold under merchanting / Receipt against export leg of merchanting trade* |
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P0302 | Travel | Business travel |
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P0801 | Computer & Information Services | Hardware consultancy |
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P0802 | Computer & Information Services | Software implementation/consultancy (other than those covered in SOFTEX form) |
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P0803 | Computer & Information Services | Data base, data processing charges |
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P0805 | Computer & Information Services | News agency services |
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P0806 | Computer & Information Services | Other information services- Subscription to newspapers, periodicals, etc. |
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P0807 | Computer & Information Services | Off-site Software Exports |
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P1002 | Other Business services | Trade related services - Commission on exports/imports." |
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P1004 | Other Business services | Legal services |
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P1005 | Other Business services | Accounting, auditing, book keeping services |
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P1006 | Other Business services | Business and management consultancy and public relations services |
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P1007 | Other Business services | Advertising, trade fair, market research and public opinion polling services |
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P1008 | Other Business services | Research & Development services |
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P1009 | Other Business services | Architectural, engineering and other technical services |
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P1010 | Other Business services | Agricultural, mining and on -site processing services - protection against insects & disease, increasing of harvest yields, forestry services, mining services like analysis of ores etc. |
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P1011 | Other Business services | Inward remittance for maintenance of offices in India |
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P1013 | Other Business services | Environmental services |
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P1101 | Personal, Cultural & Recreational services | Audio-visual and related services -services and associated fees related to production of motion pictures, rentals, fees received by actors, directors, producers and fees for distribution rights. |
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P1201 | Government, not included elsewhere (G.n.i.e.) | Maintenance of foreign embassies in India |
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P1203 | Government, not included elsewhere (G.n.i.e.) | Maintenance of international institutions such as offices of IMF mission, World Bank, UNICEF etc. in India. |
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P1301 | Transfers | Inward remittance from Indian nonresidents towards family maintenance and savings |
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P1302 | Transfers | Personal gifts and donations |
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P1303 | Transfers | Donations to religious and charitable institutions in India |
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P1304 | Transfers | Grants and donations to governments and charitable institutions established by the governments |
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P1401 | Primary Income | Compensation of employees |
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P1403 | Primary Income | Inward remittance towards interest on loans extended to non-residents (ST/MT/LT loans) |
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P1501 | Others | Refunds / rebates on account of imports |
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P1502 | Others | Reversal of wrong entries, refunds of amount remitted for non-imports |
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Please note that this tool doesn't contain the exhaustive purpose code list for inward remittance. For complete compliance and accuracy, it's always advisable to get in touch with your financial advisor for professional advice.
Personal vs. Business: Quick Selector for the Right Purpose Code
Personal / family inflows (individuals):
- Regular support from an NRI? → P1301 (Family maintenance & savings)
- Gift from a relative abroad? → P1302 (Personal gifts & donations)
- Salary from a foreign employer? → P1401 (Compensation of employees)
Business / freelance inflows (exporters, agencies, SaaS, consultants):
- Payment after goods shipment? → P0102 (Export realisation – goods)
- Advance before shipment? → P0103 (Advance receipts – goods)
- Software/IT implementation or consultancy? → P0802 (Software implementation/consultancy)
- Commission on export/import deals? → P1002 (Trade-related commission)
- Advisory/management/PR fees? → P1006 (Business & management consultancy & PR)
Common RBI Purpose Codes for Inward Remittance for Freelancers, Businesses, and Agencies
While there are over 150 RBI purpose codes for inward remittance, we break down below some of the commonly used ones especially for freelancers, businesses and agencies:
Purpose Code: P0802
RBI Category: Computer & Information Services
RBI Description: Software implementation/consultancy (other than those covered in SOFTEX form)
When to use: This code signifies a foreign payment in exchange for software consultancy or implementation service, provided to a foreign client. It's important to note that P0802 applies specifically to software consultancy or implementation services that are not reported under the SOFTEX form. If your services fall under SOFTEX, a different code might be used.
Purpose Code: P0102
RBI Category: Export (Of Goods)
RBI Description: Realisation of export bills (in respect of goods) sent on collection (full invoice value)
When to use: This code is used when an Indian company exports goods and receives payment for the full invoice value. Note that this purpose code is applicable only when the foreign client has received the shipment.
Purpose Code: P0103
RBI Category: Export (Of Goods)
RBI Description: Advance receipts against export contracts (export of goods only)
When to Use: This is used when businesses receive advance payment against the contract of the goods to be exported. In other words, here the company receives payment for goods before they are shipped.
Purpose Code: P1006
RBI category: Other Business services
RBI Description: Business and management consultancy and public relations services
When to Use: This code is applicable when an exporter receives payment against providing a combination of business expertise and/or public image management services to a foreign client.
Purpose Code: P1007
RBI Category: Other Business services
RBI Description: Advertising, trade fair, market research and public opinion polling services
When to Use: This code is used when exporters receive a payment from a foreign client for providing advertising, trade fair, market research or public opinion polling services.
Purpose Code: P0101
RBI Category: Export (Of Goods)
RBI Description: Value of export bills negotiated/purchased/discounted etc. (covered under GR/PP/SOFTEX/EC copy of shipping bills etc.)
When to Use: P0101 is used when an Indian company exports goods and receives a foreign payment that is usually backed up by official export documentation like GR, PP, SOFTEX, or EC copy of shipping bills.
Purpose Code: P0103
RBI Category: Export (Of Goods)
RBI Description: Advance receipts against export contracts (export of goods only)
When to Use: This is used when businesses receive advance payment against the contract of the goods to be exported. In other words, here the company receives payment for goods before they are shipped.
Purpose Code: P0108
RBI Category: Exports (of Goods)
RBI Description: Goods sold under merchanting / Receipt against export leg of merchanting trade*
When to Use: This purpose code for inward remittance applies to situations where an Indian company acts as a middleman in an international trade transaction, but the goods themselves never physically enter India.
Purpose Code: P0801
RBI category: Computer & Information Services
RBI Description: Hardware consultancy
When to Use: This code is used when exporters receive foreign payment for providing hardware consultancy or implementation services abroad.
Purpose Code: P0302
RBI Category: Travel
RBI Description: Business travel
When to Use: This purpose code for inward remittance is used for foreign exchange transactions related to business travel, particularly when someone converts currency for a work trip abroad.
Purpose Code: P0807
RBI Category: Computer & Information Services
RBI Description: Off-site Software Exports
When to Use: This code signifies that an Indian company is receiving payment for software development or IT services provided to a foreign client, but the work itself is done in India.
How and Where to Declare the RBI Purpose Code
Choosing the right RBI purpose code for inward remittance is only half the job, you also need to make sure it’s declared at the right stage of the transfer so banks can process it smoothly.
1. During the remittance setup
Most international transfers require the sender to enter a purpose when initiating the payment.
- Banks and remittance platforms usually capture this in SWIFT field 70/72 (narrative fields).
- That’s why it’s important to share the exact RBI P-code with your payer before they send the money.
- If the sender selects the wrong option, your bank may delay or return the funds.
(Example: HDFC Bank’s wire transfer form from the US specifically asks for the purpose of remittance and provides a dropdown of RBI-approved codes.)
2. If the bank asks you (as the recipient) later
Sometimes, the bank receiving the funds will seek additional confirmation from you. In this case:
- You’ll be asked to submit a declaration form stating the correct purpose code.
- Supporting documents such as invoices, contracts, SoWs (for services), or employment letters (for salary inflows) are often required.
- Banks rely on these proofs to align the declared purpose with RBI’s reporting system.
Documents Required for Inward Remittance
Banks may ask for basic proof to ensure your RBI purpose code for inward remittance matches the transaction. Here’s what’s typically needed:
- Goods exports (P01 series): Invoice, packing/shipping documents, and purchase order/contract (for advances).
- Services exports (P08/P10 series): Contract/SoW and matching invoices; sometimes proof of delivery (emails or logs).
- Personal inflows (P13/P14 series): Salary (P1401): employment letter or payslip. Family maintenance/gifts (P1301/P1302): a simple declaration if asked. Dividends/profits (P1407/P1406): dividend advice or board approvals.
Tip: Make sure your invoice or declaration clearly matches the selected purpose code, as it reduces bank queries and speeds up credit.
What Happens If You Use the Wrong RBI Purpose Code?
Using the wrong RBI purpose code for inward remittance can create more problems than most exporters, freelancers, or individuals expect. Because banks are required to match the declared purpose with supporting documents and report it to RBI under FEMA, any mismatch immediately slows things down.
Likely outcomes of an incorrect purpose code
- Delays in credit: The bank may pause the transaction for internal review, which can hold up your payment for days.
- Manual scrutiny: Compliance teams will ask for invoices, contracts, or letters to verify the real purpose.
- Return to sender: In some cases, the remittance can be reversed if the purpose doesn’t align with RBI’s approved list.
- Compliance red flags: Repeated errors can raise audit queries or penalties under FEMA regulations.
How to fix a wrong purpose code quickly
- Contact your bank immediately once you identify the error.
- Submit a corrected declaration stating the actual purpose of funds.
- Provide supporting documents such as invoices (for exports/services), contracts/SoWs, employment letters (for salaries), or gift declarations.
- Track your FIRC/e-FIRC issuance to ensure the corrected purpose reflects properly in your compliance records.
Pro tip
Always share the correct purpose code with your payer before the transfer starts. Many international platforms ask the sender to select the code at setup, so confirming it upfront avoids mismatches and saves you from unnecessary compliance hassles.
Simplifying Cross-Border Payments for Indian Businesses
Getting the purpose code for inward remittance right is just one part of the process. For exporters, freelancers, and growing businesses, the bigger challenge is ensuring every international payment is fast, cost-efficient, and compliant.
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When should I use Purpose Code P0802?
This code signifies a foreign payment in exchange for software consultancy or implementation service, provided to a foreign client. This could encompass a wide range of software-related activities, such as:
- Software development and implementation
- Software customisation and integration
- Software maintenance and support
- Software licensing and training
It's important to note that P0802 applies specifically to software consultancy or implementation services that are not reported under the SOFTEX form. If your services fall under SOFTEX, a different code might be used.
When is Purpose Code P1006 to be used?
What is Purpose Code P1401?
What will happen if I use an incorrect Purpose Code?
When shall I use purpose code P0108?
What is Purpose Code P0803
What is Purpose code P0807
What is purpose code P1401
How to Find the Right RBI Purpose Code for Your Inward Remittance?
How to Update or Correct an RBI Purpose Code?
