The answer
P0802 is the RBI purpose code for software consultancy and implementation: custom development, integration, technical advisory, testing, maintenance. P0807 is for off-site software product exports, including SaaS subscription revenue and licensed product exports delivered from India. Both codes remain in force after 1 October 2026. SOFTEX itself is discontinued, replaced by a monthly EDF filed with the AD bank.
What the EDF replaces in the SOFTEX process
For software exporters, the switch from SOFTEX to EDF changes the mechanics of filing, not the fact that a declaration must be made. Six things change on 1 October 2026:
- The form. SOFTEX is discontinued. A single EDF now covers goods, services and software.
- The filing frequency. Per-invoice SOFTEX is replaced by one consolidated EDF per calendar month, covering every overseas client billed in that month.
- The filing route. STPI certification is no longer mandatory in the Domestic Tariff Area. Software exporters can file EDF with their AD bank or with STPI. SEZ units file with the SEZ Development Commissioner.
- The deadline. SOFTEX had to be filed within 30 days of the invoice. EDF is due within 30 days from the end of the invoicing month.
- The realisation window. The period to receive payment moves to 15 months from the invoice date, or 18 months if the invoice is raised or settled in INR through an RBI-permitted channel.
- Small-invoice closure. For invoices up to ₹10 lakh (or the FCY equivalent), the EDPMS entry can be closed on the exporter’s own declaration, with quarterly bulk-closure allowed.
What does not change: the purpose codes themselves. P0802 and P0807 continue to classify the remittance under FEMA. The choice between them remains, and after 1 October 2026 it turns on the nature of the service, not on whether a SOFTEX was filed.
P0802 vs P0807: side by side
|
Requirement |
P0802 |
P0807 |
|
Official description |
Software consultancy / implementation (other than covered in SOFTEX) |
Off-site software exports |
|
FEMA classification |
Computer and information services |
Telecommunication, computer and information services |
|
Nature of work |
Bespoke, service-shaped: custom build, integration, advisory, hands-on delivery to one client |
Product-shaped: platform, licence, or productised off-site delivery consumed by many clients |
|
Typical services |
Custom software development, IT consulting, system integration, implementation, testing, maintenance and support |
SaaS subscriptions, off-site product development, hosted software delivery, licensed software revenue |
|
Delivery mode |
Off-site from India (on-site work abroad falls under different codes) |
Off-site from India |
|
Pre-Oct 2026 SOFTEX linkage |
Used when SOFTEX was not filed |
Used when SOFTEX was filed |
|
Post-Oct 2026 selector |
Nature of work is consultancy or implementation (project-shaped) |
Nature of work is a product or subscription (recurring or licence-shaped) |
|
Typical exporter |
Freelance developers, IT services agencies, consultancies, custom-dev shops |
SaaS companies, software product firms, licensed-IP businesses |
|
EDF requirement (from 1 Oct 2026) |
Yes: monthly EDF via AD bank |
Yes: monthly EDF via AD bank or STPI |
The process, in numbered steps
What the Indian exporter does
- Classify the service before the first invoice. If the work is a custom build, integration, implementation or advisory engagement, the code is P0802. If the receipt is for a SaaS subscription, a licence, or an off-site software product delivery, the code is P0807. Written scope on the invoice and the SOW should describe the service in terms that match the chosen code.
- Raise the invoice in a freely convertible currency (or INR through an RBI-permitted channel), with the client’s name and country, the service description and the invoice value.
- Instruct the payment channel. Communicate the purpose code to the payer or configure it in the payment provider’s dashboard so the correct code is assigned at settlement.
- Collect payment into the AD bank account or a regulated payment aggregator (PA-CB) that settles into it.
- Verify the FIRA when payment lands. The FIRA carries the purpose code the bank actually reported to RBI. Reconcile it against the intended code and flag any mismatch to the bank immediately.
- File one EDF at the end of the month covering every invoice raised that month, with the AD bank, within 30 days from month-end. Software exporters can alternatively file with STPI.
What the foreign payer does
- Pays the invoice to the Indian exporter’s AD bank account or the payment aggregator account, using SWIFT, ACH or the provider’s rails.
- Records the invoice number and any purpose-code reference in the remittance message so the receiving bank tags the payment correctly.
- The payer is not required to file any Indian form. Purpose-code classification is the exporter’s and the AD bank’s responsibility.
Documents to keep, and the purpose code
For every invoice, hold the following on file. The AD bank may request them at filing or during EDPMS reconciliation.
- Invoice, with the service description written to match the chosen purpose code (consultancy/implementation for P0802; software product, SaaS or licence for P0807).
- Statement of Work or contract, showing the scope, deliverables and payment terms.
- Remitter details: the paying party’s legal name, address and country. Third-party payments are permitted where the AD bank is satisfied with the bona fides.
- Proof of delivery: completion emails, acceptance notes, access logs or timesheets for P0802; subscription activation records, licence keys or product access logs for P0807.
- FIRA, showing the purpose code the bank recorded against the receipt.
- EDF reference from the monthly filing
Picking the code, once and cleanly
Two rules of thumb hold after 1 October 2026:
- If the receipt would appear as recurring revenue on a product P&L (SaaS ARR, licence renewals, hosted-software fees), the code is P0807.
- If the receipt is milestone or hourly billing for a bespoke engagement (custom development, implementation, integration, technical consulting, ongoing maintenance for a specific client), the code is P0802.
Mixed engagements (a SaaS subscription bundled with implementation work) can carry both codes across separate invoices. Ask the AD bank in advance rather than filing the whole receipt under one code.
How the codes apply across invoice bands
The ₹10 lakh EDPMS closure threshold sits at roughly US$11,300 at ~₹88/USD. Purpose-code selection is independent of the invoice value. Filing obligations for the EDF are also identical across bands: one EDF per month, filed within 30 days of month-end. What differs by band is only the closure route inside EDPMS.
|
Invoice band (USD) |
Example service |
Purpose code |
EDPMS closure |
|
$5,000 |
Two-week integration project for a US client |
P0802 |
On exporter’s self-declaration; can be batched quarterly |
|
$12,000 |
Annual SaaS subscription from a UK customer |
P0807 |
Standard AD bank closure on FIRA match |
|
$50,000 |
Fixed-scope custom development for an Australian firm |
P0802 |
Standard AD bank closure on FIRA match |
Rules that apply, band by band
- All three invoices, if raised in the same calendar month, are covered by one EDF filed within 30 days from month-end.
- The purpose code is chosen per invoice by the nature of the work, not by the invoice value.
- For any invoice up to ₹10 lakh, the EDPMS entry can be closed on the exporter’s own declaration under Regulation 4 of the 2026 Regulations, with quarterly bulk closure allowed.
- For invoices above ₹10 lakh, the AD bank matches the FIRA to the EDF entry and marks it off in EDPMS in the standard way.
- Realisation window applies uniformly: 15 months from invoice date, or 18 months if invoiced or settled in INR through an RBI-permitted channel.
Frequently Asked Questions
Which purpose code to use to receive an international business payment in India?
It depends on what the payment is for, not who sent it. For software and IT work, use P0802 if you were paid for consultancy, custom development, integration or implementation, and P0807 if you were paid for a SaaS subscription, a software licence or an off-site software product. Other business services, such as marketing or management consulting, sit under different codes, mostly in the P10 (other business services) group. Confirm the exact code with your bank before the first payment lands.
What purpose code should a freelancer use to receive foreign payments?
Most software freelancers should use P0802. Freelance work is typically billed by the hour or by milestone for a specific client, which is what P0802 covers. P0807 only fits if you are selling a product, licence or subscription rather than your time. Designers, writers and marketers usually need a different code from the P10 group, so check with your bank.
What is the purpose code for remittances from abroad to India?
If the money is payment for work you did, the code follows the service (P0802 or P0807 for software and IT, other codes for other services). If it is money sent by family abroad for household expenses or savings, it is not an export receipt at all and falls under the family maintenance code (P1301). Using a business code for personal money, or the other way round, causes problems at the bank.
How to receive payments from an international client in India?
Raise an invoice in a foreign currency (or INR through an RBI-permitted channel) with the client's name, country and a clear service description. Ask the client to pay into your AD bank account or a regulated cross-border payment aggregator (PA-CB). Make sure the right purpose code is set, collect the FIRA once the money lands, and from 1 October 2026 include the invoice in your monthly Export Declaration Form (EDF).
How do I receive payment from a foreign client as a freelancer?
Invoice the client, share your bank or payment account details, and tell your bank or payment provider the purpose code (usually P0802 for freelance software work). The client just pays the invoice; they don't file anything in India. Once the money is credited, download the FIRA and keep it with the invoice, because you will need both for your EDF filing and your tax records.
Does the SOFTEX-based rule for picking P0807 still work after 1 October 2026?
No. The old shortcut of 'SOFTEX filed means P0807, no SOFTEX means P0802' stops working because SOFTEX is discontinued from 1 October 2026 and all software exporters move to the monthly EDF. Both P0802 and P0807 remain valid. The code now depends only on the nature of the service: consultancy and implementation for P0802, off-site product exports and SaaS for P0807.
