Taxation & Compliance
Posted on May 22, 2025
With today's growing economy, indian freelancers are also growing and working internationally with global clients. Whether you are a content writer, working with a U.K based startup or a graphic designer working with US clients, you are most likely to receive payments in foreign currency.
The process of receiving international payments may seem straightforward and easy but they come with a lot of legal and financial requirements, especially when it comes to dealing with indian foreign exchange law.
One key document that every freelancer dealing with international payments should know about is FIRA.
What is FIRA?
FIRA stands for Foreign Inward Remittance Advice is a legal document issued by your Indian bank confirming that you have received an international payments from a foreign source. It acts as a receipt for the international payments sent from outside the Indian into your local bank account.
Once you receive an international payment in your local bank account, your bank verifies a few details, such as the source of the payment, the amount, and the purpose of the payment. Once all the information is verified, your bank provides you with a FIRA, which includes the following details:-
Your client details (name and country of sender)
Name of recipient (you)
Purpose of transaction (For example, export of goods/services)
Amount received in a local bank account
Currency in which the transaction was made
Date of amount credited
Reference ID
Remitting bank details
FIRA can only be generated by an authorised dealer bank, which means any bank that is authorised by the RBI to deal in foreign exchange.
What are the benefits of FIRA?
Mainting your FIRAs provide you with a variety of benefits, especially for indian businesses or freelancers are who trying to build long term businesses or track their financial records.
Proof of foreign income- FIRA is an authentic and legal document accepted by the RBI. It is a legal proof that you have been paid by your client, the amount has been transferred to your local bank account in accordance with FEMA regulations.
Important for income tax filing- Freelancer who earn in foreign currency must declare in their books as income from business while filing ITR. FIRA acts as a proof of financial record to declare such incomes accurately and avoid penalities.
GST proof- If you are GST registered export company, you may be eligible for zero GST on the export of your services. FIRA acts as a proof for GST redemption, to show that the services has been provided to foreign clients and the amount has been received in a foreign currency- which is a mandatory requirement for claiming GST.
Helps in tracking income- FIRA helps you to maintain a record of your foreign remittances. This is usually helpful when scaling up, hiring help or establishing a business entity.
Why is FIRA important for Indian freelancers?
Freelancers usually underestimate the importance of compliance and proper documentation until it's time for the financial audit and tax seasons. If you are a freelancer receiving payment from abroad, here is why you should not overlook the importance of FIRA-
Avoid penalties- Under FEMA regulations, every foreign inward remittance must be accounted for. If the purpose of the foreign income is not properly documented, you may face surveillance from the RBI or the income tax authorities. FIRA helps you eliminate that risk.
Professionalise your freelancing- Clients and financial institutions like banks take you seriously when your business operation is more transparent and compliant. Managing and recording FIRA means you are handling your freelancing business professionally.
Support for future funding- If you are planning to register a company, investors and banks will require your income statement. Maintaining FIRA will help you validate your income and international market reach.
Important for business foundation- If you ever wish to structure your freelancing business into a more structured way by onboarding new team members or applying for startup grants then maintaining FIRA will help you as a credible source for your international income and business history.
How to obtain FIRA through Infinity?
Traditional way of obtaining FIRAs is by contacting your bank, waiting for the manual process or even sometimes visiting the branch. This whole process is a task and needs constant follow up to get it done. This is where Infinity comes it. Infinity can simplify the whole process of obtaining FIRA automatically right after every transaction.
Here is how you can obtain FIRA through Infinity-
✅Step 1: Receive your international payments via Infinity
Set up a multi-currency account with Infinity and share the account details with your international client. Infinity supports payment in 50+ currencies across the globe.
✅Step 2: Payment conversion in local currency
Once you receive your amount in foreign currency you can convert it at your preffered live FX rate and 0 Fx markup and credit the amount into your local bank account. Through Infinity you receive your international payments with 24 hours.
✅Step 3: Automatic FIRA generation
Once a transaction is successfully completed, Infinity automatically generates FIRA for you. You get notified through email or the Infinity dashboard.
✅Step 4: Easily accessible
You can easily download and access your FIRA anytime and use it for legal and compliance purposes like tax audit or financial application.
Infinity makes the process of compliance a lot more easier as you can get your paperwork down in few clicks. This mean by using Infinity, you do not just get paid faster, but also you can skip the banking headaches of getting FIRA.
Conclusion
As a freelancer, you are working with global clients as well, sp it is important for you to manage your international payments like your business, that means maintaing proper documentation and paperwork.
FIRA is a key documents while receiving your international payments as it is a digital proof of your foreign income, compliant document and key paper for growing your business. Whether you are filing your tax audits or scaling your freelancing business, FIRA is a document you will be needing at every step.
Infinity is a modern fintech solution for you to automate your compliance process, ensures timely international payments and gets FIRA delivered in your inbox, making the entire process hassle-free.
By using Infinity you can easily focus on the growth of your business without worrying about the headaches related to the traditional method of receiving international payments. So, get paid smarter, get paid by Infinity!
FAQs
Is FIRA a mandatory document for me as a freelancer for every payment I receive outside India?
Yes, if you are receiving payments outside India, then FIRA is a mandatory document as proof of transaction.
Can I get FIRA for payment received through PayPal or Wise?
Most traditional platforms, like PayPal or Wise, do not directly provide FIRA as they route funds through intermediary channels. Platforms like Infinity are RBI-authorised and are built for cross border payments, provides you with instant and free-of-cost FIRA after every transaction.
