Banks are asking some freelancers and individual service providers to file Export Declaration Forms despite an RBI exemption, exposing confusion over India’s new foreign exchange reporting rules.
India’s foreign exchange reporting rules have triggered confusion for freelancers and other service providers after some banks began asking individuals to submit an Export Declaration Form, or EDF, for overseas payments. The Indian Express reported that the issue intensified after a marketer said on social media that his bank had demanded the filing for consulting income, even though the Reserve Bank of India has said personal service transactions by individuals are not meant to fall under the new reporting burden. Reuters-style clarity has been lacking in the rollout, leaving many earners unsure whether they need to complete a formal declaration before getting paid.
Under the new Foreign Exchange Management regulations, which took effect on October 1, service exporters are generally required to file an EDF within 30 days of the end of the month in which an invoice is raised. Business Standard reported that RBI governor Sanjay Malhotra has said individuals carrying out personal service transactions, including tutoring and small software work, do not have to report those payments under the new framework. The exemption is meant to ease compliance for people earning from services abroad, but it has not yet been reflected uniformly by banks handling remittances.
That gap between policy and practice is part of the problem. Setindiabiz reported that companies, LLPs and firms are clearly covered by the new filing requirement, while individuals undertaking personal services overseas are exempt, yet some banks continue to act as if the old process still applies. The Indian Express also reported that the central bank has acknowledged the misunderstanding and intends to issue more detailed clarification soon, including an FAQ document.
The reporting regime also sits alongside tighter deadlines for bringing export proceeds back into India. According to BusinessLine, the time limit for realising and repatriating export earnings has been cut to nine months from 15 months, while rupee-settled exports now face a 12-month deadline instead of 18 months. Those timelines are separate from EDF filings, adding another layer of compliance for service exporters already juggling invoices, remittance records and bank instructions. Industry groups have pushed for temporary relief for micro and small exporters, but that proposal has not been approved.
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