When a US company pays you from India, the money and the compliance work follow different paths depending on whether you are a contractor or hired through an Employer of Record (EOR). As a contractor, USD lands via Wise, Payoneer, Deel, or a direct SWIFT wire, each with its own conversion cost, and you owe GST and income tax on that income yourself. If the engagement qualifies as an "export of services" (you are in India, the client is abroad, payment arrives in foreign exchange), you can typically file a Letter of Undertaking (LUT) on the GST portal to invoice without charging 18% IGST, and if your gross receipts stay under roughly Rs 75 lakh with most of it received digitally, a presumptive taxation scheme may let you treat only half of it as taxable profit. One common point of confusion: the $250,000-a-year Liberalised Remittance Scheme (LRS) cap applies to money Indians send abroad, not to foreign income you receive; there is no LRS limit on what a US client can pay you. None of this replaces a chartered accountant. It is the map, not the advice.
Most guidance aimed at India-based remote workers stops at "you'll owe some tax." That is true but not useful. Here is how the payment actually moves, what you are on the hook for, and where the real decision points are, so you walk into a conversation with a chartered accountant already knowing the right questions.
How does the money actually get from a US company to your Indian bank account?
It depends on how you are engaged. If you are hired through an Employer of Record (EOR) like Deel, Remote, or Multiplier, the EOR runs local payroll: you get a normal INR payslip with tax already deducted at source, same as any Indian job. If you are an independent contractor, the US company pays you directly through a payment platform or wire, and the conversion and transfer happen on your side, which is the part most candidates have not dealt with before.
Do you need to charge GST on an invoice to a US client?
Usually not, if the engagement qualifies as an export of services: you are based in India, the client is outside India, the place of supply is outside India, and payment arrives in convertible foreign exchange. Such supplies are zero-rated under the IGST Act. To invoice without paying 18% IGST upfront and chasing a refund later, a GST-registered freelancer typically files a Letter of Undertaking (LUT) on Form RFD-11 through the GST portal, generally renewed each financial year. GST registration itself becomes mandatory once turnover crosses roughly Rs 20 lakh for services; sources differ on whether voluntary registration below that threshold is required to claim LUT and input-tax-credit benefits, so confirm your specific case with a chartered accountant rather than assuming either way.
This is general information, not tax or legal advice. GST, income-tax, and FEMA rules for India-based freelancers and contractors serving foreign clients are nuanced, change over time, and depend on exactly how your engagement is structured. Confirm your specific situation with a qualified chartered accountant before you invoice your first US client. A one-time consultation is far cheaper than a filing mistake.
How is this income taxed, and can presumptive taxation reduce the work?
If your total tax liability for the year exceeds Rs 10,000, India generally requires you to pay advance tax in installments through the year rather than one lump sum at filing time, so build that into your cash-flow planning from the first invoice. On the income-tax side, Section 44ADA lets eligible professionals treat only 50% of gross receipts as taxable profit, available up to roughly Rs 75 lakh in gross receipts for a financial year provided at least 95% of that is received through digital or banking channels (the limit is Rs 50 lakh otherwise). Section 44AD offers a comparable presumptive scheme for business income at a different deemed-profit rate. The catch for sales, marketing, and GTM contractors specifically: 44ADA applies to a defined list of "specified professions" (legal, medical, engineering, architecture, accountancy, technical consultancy, and a few others), and a sales or GTM contractor does not automatically qualify the way a consultant or engineer does. Whether your income is "professional" or "business" income for tax purposes is exactly the kind of question to put to a chartered accountant before you file, not after.
Is there a limit on how much a US company can pay you in a year?
No, and this is the most common misunderstanding on this topic. The Liberalised Remittance Scheme (LRS) caps how much money an Indian resident can send abroad, at $250,000 per person per financial year, and has stayed at that level since 2015. That scheme governs outward remittances; it has nothing to do with foreign income arriving in India. There is no LRS-style cap on what a US client or employer can pay you. The rules that do apply on the receiving side are ordinary FEMA export-of-services and banking requirements, such as your bank's documentation for foreign-currency receipts and (under a GST LUT specifically) a requirement to realize export proceeds within a defined window, commonly cited as one year from the invoice date for services. Confirm the current realization deadline and any bank-side paperwork directly with your bank or a chartered accountant, since these are compliance deadlines, not guidance you want to get wrong.
Which payment method should you actually use to receive USD?
The published fees below are indicative and change, so verify current pricing directly before you choose. As a rough guide: Wise generally offers the most transparent conversion rate with little or no markup, but auto-converts to INR immediately, so you cannot hold a USD balance. Payoneer is often free for person-to-person transfers but adds a card-payment fee and a separate conversion or withdrawal cost when you move funds to an Indian bank, which several sources put in the 1%-4% range overall. Deel and similar EOR/payments platforms charge a flat monthly fee (commonly cited around $49) plus any wire and conversion costs, and are mainly relevant when your employer, not you, chooses the rail. PayPal and a plain SWIFT wire tend to be the most expensive once intermediary fees and FX markup are totalled, with some estimates putting PayPal's all-in cost as high as 6%-8%.
| Method | Typical cost | Best for |
|---|---|---|
| Wise | Roughly 0.3%-2%, mid-market rate | Transparent, low-cost conversion; funds auto-convert to INR |
| Payoneer | Free person-to-person; ~1%-4% on card payments/withdrawal | Freelancers invoicing multiple clients from one account |
| Deel (or similar) | ~$49/month flat, plus wire/conversion costs | When the employer runs payroll or contractor payments through it |
| SWIFT wire / PayPal | Often the highest all-in cost (PayPal cited up to ~6%-8%) | One-off or low-volume payments where convenience matters more than cost |
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Join the talent network →Frequently asked questions
Does the $250,000 LRS limit apply to money a US company pays you?
No. LRS governs money Indian residents send abroad, up to $250,000 per person per financial year. It has nothing to do with foreign income you receive. There is no LRS cap on how much a US client or employer can pay you; that income is simply foreign exchange earnings, governed by ordinary FEMA export-of-services and banking rules, not by the outward-remittance scheme.
Do you need to charge GST on an invoice to a US client?
Usually not, if the engagement qualifies as an export of services: you are based in India, the client is outside India, the place of supply is outside India, and payment arrives in convertible foreign exchange. Such supplies are zero-rated under the IGST Act. To invoice without charging 18% IGST upfront, a GST-registered freelancer typically files a Letter of Undertaking (LUT) on Form RFD-11 through the GST portal for the financial year. Registration itself becomes mandatory once turnover crosses roughly Rs 20 lakh; confirm your specific situation with a chartered accountant, since sources differ on whether voluntary registration below that threshold is required to claim LUT benefits.
Can you use presumptive taxation on freelance income from a US company?
Often, yes, though which scheme applies depends on how your work is classified. Section 44ADA lets eligible professionals treat 50% of gross receipts as taxable profit, available up to roughly Rs 75 lakh in gross receipts for a financial year provided at least 95% of that is received through digital or banking channels (the limit is Rs 50 lakh otherwise). Section 44AD offers a similar presumptive scheme for business income at a lower deemed-profit percentage. A sales, marketing, or GTM contractor is not automatically a "specified professional" under the tax rules the way a consultant, engineer, or accountant is, so a chartered accountant should confirm which section actually applies to your contract before you file.
Which payment method should you use to receive USD from a US client?
It depends on your volume and how much you value simplicity versus cost. Wise generally offers the most transparent conversion rate with no markup, though it auto-converts to INR immediately. Payoneer is often free person-to-person but adds a card-payment fee and a separate conversion/withdrawal cost when you move funds to an Indian bank. Deel charges a flat monthly fee plus any wire and conversion costs, mainly relevant if your employer runs payroll through it. A direct SWIFT wire or PayPal tends to be the most expensive route once fees and FX markup are totalled. Compare the current published fees directly before committing, since these change.
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