P0807 Purpose Code: Off-site Software Exports

Purpose code P0807 is used when an Indian software business receives payment from a foreign client for work built and delivered remotely from India under a SOFTEX filing.

What is the P0807 purpose code?

Purpose code P0807 is used when an Indian business exports software or IT services that are produced in India and delivered to a client abroad without anyone travelling. Off-site is the operative word: your team works here and the output goes out electronically, whether that is a development project, a SaaS subscription, or ongoing IT delivery. What separates this from the other software code is the SOFTEX filing, since P0802 exists specifically for software consultancy and implementation that falls outside the SOFTEX net while exports inside it belong here. Under RBI FEMA guidelines, this inward payment is classified under Telecommunication, Computer & Information Services and reported accordingly.

When to use P0807 purpose code?

Use P0807 when you export software or IT services from India, the work is performed here rather than at the client's site, and the export is reported through a SOFTEX filing. It is the correct RBI purpose code for off-site software exports, including recurring SaaS revenue from overseas customers. Whether SOFTEX applies to your business is the question that settles the code, so establish it before your first remittance rather than after.

When to use a different code:

• Use P0802 when the payment is for software consultancy or implementation not covered by a SOFTEX filing
• Use P0804 when the payment is for repair and maintenance of software already delivered
• Use the matching S-code when you are paying a foreign vendor rather than receiving money

Who typically uses P0807 purpose code

Indian software companies, SaaS businesses, product firms and IT services exporters delivering to overseas clients from India, particularly those registered with STPI or operating in an SEZ where SOFTEX filing applies. It applies whether you export as a proprietorship, a partnership, or a registered company, so long as the SOFTEX obligation attaches to your exports.

Examples of transactions covered under P0807 purpose code

• Monthly or annual SaaS subscription revenue from overseas customers
• Payment for a development project built in India and delivered remotely to a foreign client
• Recurring IT services revenue from an international client where the team works from India
• Milestone payment on an off-site software export reported through SOFTEX

When NOT to use P0807 purpose code

• The software work is not covered by a SOFTEX filing (use P0802)
• The payment is for repair and maintenance of software rather than the export itself (use P0804)
• Your team travelled to the client's location abroad to deliver the work, which is on-site rather than off-site
• You are paying a foreign vendor rather than receiving (use the matching S-code)

Documents required for P0807 purpose code

To receive a payment under P0807, keep the following documents ready so your bank or platform can verify the transaction and report it correctly under FEMA.

How is a P0807 Purpose Code declared?

Declaring the code is pretty straightforward. Here's how the payment gets tagged and reported.

1. Raise your invoice: Bill your foreign client for the software or IT services, noting that delivery was off-site from India.
2. File your SOFTEX: Submit the SOFTEX declaration to STPI or the SEZ authority within the period allowed, since the filing is what supports this code.
3. Receive the payment: The client sends the money to your bank or receiving account.
4. Declare the purpose: State the purpose of the inward remittance, on your bank's form or through your platform.
5. Get your FIRA: Once processed, your FIRA is issued as proof and the payment is reported under FEMA.
6. With a traditional bank you handle each step of your payment journey. But with a platform built for cross-border payments, you can preselect a default purpose code so that the payments land smooth.

Common mistakes to avoid while using P0807 purpose code

A few common slips can hold up your payment or cause compliance issues. Here's what to watch for.

1. Choosing the code before settling SOFTEX: Picking between P0807 and P0802 on the shape of the work, when the SOFTEX obligation is what actually decides it. Establish whether SOFTEX applies to your business first.
2. Missing the SOFTEX filing behind the remittance: Declaring P0807 without the underlying filing in place, which leaves the receipt unsupported when the bank looks for it.
3. Code and invoice mismatch: The code not matching what your invoice and SOFTEX declaration describe, which flags the payment.
4. Incomplete documents: Missing the SOFTEX form, invoice, or contract, so the bank holds funds until provided.
5. Missing PAN or KYC: Incomplete verification stops the bank from releasing the payment.
6. Using an inward code for an outward payment: Applying a receipt code to money you're sending out instead of the matching outward code.

How Skydo simplifies inward remittance under P0807 Purpose Code

With a bank, you declare the purpose code on your own for every single payment. With Skydo, you can preselect your code once and every payment gets tagged automatically.

1. Preselect the code once: Set P0807 as your default and Skydo tags every incoming payment for you, so there's no form to fill on each one.
2. No repeat declarations: A bank makes you restate the purpose for every remittance. Skydo does it in the background, the same way each time.
3. Instant, free FIRA: Your remittance proof is generated and stored on every payment, ready for your CA, GST, and audits, with no request and no fee.
4. Zero FX markup: You get the live mid-market rate with a flat, visible fee, instead of a markup hidden inside the bank's rate.
5. Settled in 24 hours: Your payment reaches your Indian bank within a day, fully reported and compliant.