What purpose code should freelancers use?

What is a purpose code?

Every foreign-exchange receipt an Indian bank handles is reported to RBI with a code from its purpose-code list. Codes beginning with P are receipts (money coming in); codes beginning with S are payments (money going out). The code you choose decides how your bank, your remittance advice and RBI’s data see the payment — as an export of a particular service, rather than a gift or a loan.

Which purpose code fits my profession?

The descriptions are RBI’s, from its purpose-code list as banks publish it (sources below). "Usually" is our reading of where each kind of work fits, not a ruling: if your service does not fit one cleanly, ask your AD bank before the first invoice.

P0807 or P0802: which one is mine?

P0807 (off-site software exports) is for software made in India and delivered to a client abroad without anyone travelling: custom development, app and web builds, SaaS work, maintenance releases. That is what most freelance developers and dev agencies do, so for them it is usually the right code. P0802 (software consultancy/implementation) is for advising on, configuring or implementing software — work where the deliverable is the consulting rather than code you shipped. P0802 is not for data processing or hosting (P0803), repair and maintenance (P0804), or general management consulting (P1006).

Does P0802 still say "other than SOFTEX"?

Yes — RBI’s description reads "Software consultancy/implementation (other than those covered in SOFTEX form)", and the list has not been reworded. But SOFTEX itself has gone: from 1 October 2026 software exports are declared on the same Export Declaration Form as every other service, filed with your AD bank or STPI. So read the parenthesis as history, not as a rule that steers software exports away from P0802. Choose between P0807 and P0802 by what you delivered.

What does a wrong purpose code break?

• The payment can be held or queried by the receiving bank until the code is corrected.
• Your remittance advice carries the wrong classification, which then disagrees with your invoice, your EDF and your GST return.
• A personal code — P1301 (family maintenance and savings) or P1302 (personal gifts and donations) — makes an export look like a gift, which is not an export at all.
• Banks report each receipt to DGFT with its purpose code, so a wrong code also follows the payment into any e-BRC you generate from it.

Can I change the code after the payment arrives?

Often, yes — ask your bank promptly. DGFT’s e-BRC FAQ notes that banks can amend the remittance message they report when a purpose code was wrong. It is far easier to get it right on the invoice, though: one client, one kind of work, one code, and the same code on the invoice and the payment.

A quick rule

1. Read the line on your invoice that describes the work.
2. Find the code whose RBI description matches it — the table above covers most freelancers.
3. Use the catch-all only if nothing else fits, and tell your bank why.
4. Put the code on the invoice, in your EDF, and in the payment instructions you send the client.

On Payzoplus

Your account is approved for the purpose codes that fit your business, and you cannot raise an invoice against a code it is not approved for — so a wrong code is caught before your customer pays, and the code appears on your remittance advice. See export collections, or start with the complete guide to receiving international payments in India. Paid from the US? Receiving money from a USA client covers the rest of the steps.