Taxation & Compliance
Posted on Dec 1, 2025
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If you have ever tried sending money out of India, maybe for paying for an international SaaS tool or maybe clearing an import invoice, you must have come across the term Form A1. For most people, the forms appear out of nowhere. So, one moment you are ready to make a simple outward remittance, and the other moment you have tons of paperwork to do. These can include filling Form A1, submitting purpose codes, attaching invoices, and ensuring compliance with multiple regulations.
At this point, an obvious question pops up: Why is this A1 form even needed?
And if you are a freelancer or a founder operating globally, then this is something you should know, as it can feel like unnecessary red tape.
Understanding the term Form A1 will help you in staying compliant, avoiding delays, and making your remittances smoother.
This blog will help you in understanding Form A1 in detail- like why it is needed, who needs it, and when it is needed, and much more.
So, let's get started.
What exactly is Form A1?
Form A1 is a compliance document essentially required by the AD banks in India. AD (Authorised Dealer) banks are the banks approved by the RBI to handle foreign exchange transactions. So whenever someone from India sends money abroad for any purpose, the banks have to verify the reason for remittance, whether it is genuine, legal, and traceable. Form A1 is the document that helps them do this.
It records the details of the remitter, the beneficiary, the purpose of the transaction, and the specific nature of the payment. In other words, Form A1 acts like a formal declaration from the remitter stating:
Why are you sending money abroad
Who you are paying to
Whether you are following the FEMA guidelines
Whether the remittance corresponds to an actual invoice, contract, or subscription
This form also helps the banks to classify the transactions under the correct RBI purpose codes.
Why does Indian need Form A1 for outward remittance?
To understand why Form A1 exists, you need to look at the broader context of how foreign exchange is regulated in India.
India follows the Foreign Exchange Management Act (FEMA) that governs the flow of foreign exchange in India. As it is a sensitive area, the government must track:
How much money leaves India
Why it leaves and where it is going
Whether businesses or individuals are complying with limits
Whether taxes have been properly handled or not
Form A1 serves as one of the primary tools for ensuring that outward remittances are documented accurately.
Purpose Validation
The RBI uses Form A1 to ensure clarity on the purpose of a transaction. Each outward remittance must be linked to a legitimate activity, such as importing goods, paying for a Saas subscription, making investments, or clearing commission payments.
Banks cannot simply rely on verbal declarations. Form A1 acts as a written record that stays in the bank’s audit files.
Regulatory Compliance
Foreign exchange is heavily regulated because it impacts a country’s economic stability. Form A1 ensures the remittance follows FEMA and RBI guidelines. Without this form, banks would have no structured way of verifying compliance.
Audit and Reporting
AD banks in India must report all foreign remittances to the RBI. Form A1 becomes a part of the document that helps the auditors and regulators to verify if the reporting is being done correctly or not.
Prevention of Misuse
Misclassification of international payments, intentionally or unintentionally, can cause significant regulatory issues. Form A1 acts as a safeguard against misuse by ensuring every remittance is backed by an appropriate declaration and documentation.
When is Form A1 required?
Although Form A1 is widely used, it is not mandatory for all remittances. Different banks also have slightly different internal compliance thresholds. Generally, Form A1 is required for:
Payments for imports of goods
Payments for the import of services
SaaS and subscription payment
Technical service fees
Professional or consultancy service payments
Royalty or licensing fees
Foreign investments made by companies
Commission payments
For personalised remittances under the Liberalised Remittance Scheme (LRS), like sending money for travel, gifts, or education, many banks may not require Form A1, though some still do depending on transaction size and purpose.
Form A1 for freelancers and founders
Freelancers, agencies, and startups often deal with foreign vendors, tools, and service providers. Form A1 becomes relevant for:
Paying for global SaaS tools like Figma, HubSpot, Notion, AWS, Google Cloud, and CRM tools
Paying consultation or development fees to foreign professionals
Paying for marketing tools or ads on international platforms
Clearing import invoices for goods or equipment
In almost all these cases, Form A1 becomes part of the bank’s documentation requirement.
Who is responsible for filing Form A1?
Form A1 is always filled out by the remitter and not the beneficiary. This means:
A business sending money abroad must fill out the form.
A freelancer paying a foreign consultant must fill it out.
A company making a royalty payment must fill it out
Any Indian resident sending certain types of foreign payments must fill out the form.
The bank will not complete the form on your behalf; their role is to verify the information and ensure compliance.
What information does Form A1 carry?
While Form A1 sounds intimidating, it’s actually a straightforward document. It usually asks for:
Name, address, and PAN of the remitter
Bank and account information
Name and address of the overseas beneficiary
Purpose of the remittance (with purpose code)
Invoice or contract details
Amount and currency
FEMA declaration
Signature of the remitter
Banks may also ask for supporting documents depending on the nature of the remittance. For instance:
SaaS payments → subscription invoice
Import of goods → commercial invoice and packing list
Professional services → agreement or work order
Royalty/license → contract detailing fee structure
Form A1 vs Form 15CA/CB- let's understand the difference.
Many people confuse these two because both relate to outward remittances. But they serve completely different regulatory purposes.
Form A1
Required under FEMA
Submitted to the bank
Focuses on purpose
Ensures compliance with RBI regulations
Used for classification and reporting
Form 15CA/CB
Required under the Income Tax Act
Submitted to the Income Tax Portal
Focuses on tax implications
Ensures TDS applicability is evaluated
Required for many (but not all) outward remittances
Depending on the purpose of your remittance, the bank may require one or both.
How to fill and submit Form A1?
The process is mostly bank-driven, but here’s how it usually goes:
1. Obtain the Form
Banks generally share the form via RM, email, or their online banking portal. Some banks allow fully digital filing; others still use PDFs.
2. Fill in Remitter and Beneficiary Details
Accurate information helps avoid compliance delays. Make sure your details match your bank account and KYC.
3. Select the Correct Purpose Code
RBI purpose codes classify transactions. Choosing the wrong one is one of the biggest reasons remittances get stuck.
4. Attach Supporting Documents
This may include invoices, contracts, Form 15CA/CB, declarations, or subscription bills.
5. Submit to the Bank
Submission options vary:
Upload to net banking.
Email to the RM or corporate banking team
Submission at the branch
Through banking portals designed for FX requests
Once the bank verifies the form, they process the remittance.
Conclusion: Simplifying Compliance in an Increasingly Global World
The global economy has made it easier than ever to collaborate across borders. But with that flexibility comes the need for structured compliance.
Form A1 ensures that India’s foreign exchange outflows are properly documented, transparent, and compliant with FEMA and RBI guidelines. While Form A1 may feel like just a form to fill out, it plays a critical role in ensuring smooth foreign remittances.
As cross-border financial operations are growing with every single day, it is important to have a platform that makes the process of international payments as easy as domestic payments. That is where Infinity steps in.
Infinity is a modern fintech payment platform, built to make international payments seamless and hassle-free. Infinity helps you receive international payments and manage the compliance documents and paperwork in a more streamlined way. With better tools like Infinity, it becomes easier to manage global payments in a far better way than traditional methods.
FAQs about Form A1
What is Form A1?
Form A1 is a compliance document essentially required by the AD banks in India. It helps in India to verify the reason for remittance, whether it is genuine, legal, and traceable.
Can I submit Form A1 online?
Yes, most of the banks in India accept online submission of Form A1 through email or net banking.
Do individuals using LRS need Form A1?
No. In most cases, it's not required, unless the bank needs a document for a specific purpose.
Do I need Form A1 for a SaaS or cloud subscription?
Yes, in most cases. Because these fall under the import of services.
