Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Receving money from foreign country : legal formalities

Raghu (Propriter) (34 Points)

22 September 2011

Friends, I am sorry, if i have posted in a wrong category. Please Advice. I am a freelance software consultant. there is an upcomming software development project from a foreign client. he will be doing a wire transfer into my bank account. I am about to open a bank account in company name (softInfotech) (proprietorship.) Since money is going to come from foreign country, are there any other legal formalities that i should know? Please advice.

Reply
Follow
Share

5 Replies

O.D.SHARMA (DGM-F & A) (1734 Points)
Replied 23 September 2011

Hi,

There is no issue,You are taking advance or against billing.make sure proper accounting,Billing,Records of Forex transaction.Don't worry if things/work is legal no problem.Hope u have PAN no/Tan No & checking all TDS etc liability(If any0.

2 Like

Upgrade to CAclubindia Pro. Subscribe Now!

Akhil Sharma (Service) (141 Points)
Replied 23 September 2011

Agreed with Mr. Sharma.

CA. Anuj Gupta (Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA) (7024 Points)
Replied 23 September 2011

Please remember to collect FIRC(Foreign Inward Remmitance Certificate ) from your Bank with proper descripttion of the money that you are receiving.

Anuj

+91-9810106211

femaquery @ gmail.com

1 Like

Raghu (Propriter) (34 Points)
Replied 23 September 2011

Hi SharmaJi and Anuj ji. Thanks for valuable inputs. I have few more queries.

1. If I hire contract people from some company for a month, they are charging me X amount + Service Tax.
When they produce bill, Do I have to Minus TDS from the bill amount? If yes, then I guess I will need
TAN No, otherwise not, right ?

2. Anuj ji: To get this certificate from bank, what evidence bank is going to ask me to produce?

Regards

O.D.SHARMA (DGM-F & A) (1734 Points)
Replied 24 September 2011

Hi,

There are two different components.Payment(Forex) have nothing to do with your work exp.( Thru contract technician,machine,space or other exp) you have to have TAN/PAN Nos for your ioncome return of IT & TDS return ,You may require to file TDs return on your contracts /part time technical support staff,any other exp. You can meet bank manager of your account ,He will ask for some documentation of agreements,remitance process is very simple.