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Re: About FIRC & banks in India!

vg
Weekender II

‎August 25, 2023 11:13 PM

Hi Guys,

I am first time working as contractor(software developer), I have below questions.

  1. My income if more than 20 lakh. I think, I will need to get GST number. Will I have to pay GST? and how much percentage?
  2. I will be receiving money in INR, and opted yes for FIRC on Deel. Is FIRC from Deel a valid legal document?
  3. As my bank(Kotak) will receive money in INR. I am not sure, they will not provide FIRC. what should I do n in that case if they don't?
  4. Do I have to notify bank that the foreign fund I am going to receive in account in advance to avoid later complexities?

Any other financial tips for first time contractor are welcome.

Thanks
VG

0 Likes
1 REPLY 1

AmanAnsari
Weekender II

‎August 26, 2023 12:31 PM

Hi VG,

Here are the answers to your questions. Hope they clarify some of your doubts.

  1. You have to file your GST if your income is more than 20 LPA. Fortunately for software and IT work done for foreign clients, the GST is zero rated so there is no effective GST to be paid
  2. Deel will only give you an NOC so that you can request your own bank for the FIRC. I would suggest talk to your bank and ask them which Purpose Codes fits your scenario best. Then ask Deel to send you the money using that purpose code. A wrong purpose code can be a hindrance in getting an FIRC issued
  3. If your bank (Kotak) receives money in INR, they can say it is just an NEFT transaction at their end with no forex involved, hence they cannot issue you an FIRC. This is what happened with most of the people here. I would suggest talk to your bank first. Usually there is a dedicated mailbox for issuing e-FIRCs, you can email them and ask them what they need to issue you an FIRC and if your transaction qualifies for an e-FIRC. Do this immediately when you get your first NOC.
  4. I would suggest, definitely talk to your bank so that they know your scenario beforehand. You can talk to your Kotak Relationship Manager or even the Bank Manager directly. You are a Business Customer so they should deal with you on priority.

I am also a first time Contractor and I can just say keep your paperwork up to date and be compliant with the laws. Your CA should be able to advise more on this.

Thanks,
Aman