If you build software in India and get paid from clients overseas, you’ve met the phrase “purpose code.” It sounds bureaucratic, but it’s really just a label that tells your bank (and the RBI) why you’re receiving the money. Use the right label and your funds clear faster, your paperwork stays clean, and future audits are a non-event. Miss it, or pick the wrong one and things can stall.
This guide keeps it simple and practical. We’ll cover what a purpose code is, how to pick the right export services purpose code, real-world purpose code examples for SaaS and IT, and a step-by-step flow you can copy for RBI purpose code inward remittance compliance in India (2025).
What is a Purpose Code in RBI Inward Remittance?
A purpose code is a short code your bank uses to tag an inward remittance with its reason like “software consultancy,” “off-site software export,” “management consulting,” and so on. Each tag corresponds to a standard RBI purpose code category used across Indian banks.
Think of it as metadata for your payment: what exactly did the client pay you for? Correct tagging helps banks route and report your forex flows correctly in RBI systems. (The official purpose code list groups these codes under headings like “Computer & Information Services” and “Other Business Services.”)
Why the RBI Purpose Code Matters (Beyond “Compliance”)
- Speed: Right code = fewer follow-ups from the bank. Wrong/missing code = holds and emails asking for clarification.
- Clean records: Your purpose code sits on bank advice/FIRC and ties to your invoice, which keeps audits and refunds tidy.
- Future-proofing: As you grow (bigger clients, credit lines, due diligence), crisp documentation helps you move fast without rework.
India Purpose Code 2025: What’s Relevant for SaaS and IT Exports
The core service-export codes that matter to SaaS/IT haven’t changed in spirit. For day-to-day work you’ll usually live in the P08 (Computer & Information Services) and P10 (Other Business Services) families. A few high-signal ones you’ll use most are:
- P0802 — Software consultancy/implementation (other than SOFTEX)
Use for custom development, implementation, integration, testing, maintenance delivered to foreign clients where you’re not filing Softex. - P0807 — Off-site Software Exports
Use when you export software/services from India (e.g., SaaS subscriptions, off-site dev projects delivered from India). Many product/SaaS companies default to this. - P1006 — Business & management consultancy / public relations
Use when the engagement is advisory (strategy, transformation, PMO) rather than hands-on software work. - P1016 — Market research & public opinion polling
Use for research/insights, user studies, GTM research you deliver to foreign clients. - P1014 — Engineering services
Useful if you provide engineering/technical services that aren’t strictly software consultancy (e.g., specialized tech/embedded/industrial). - P1022 — Other technical services (incl. scientific/space)
A catch-all for niche technical work not covered elsewhere. Use sparingly and only when nothing else fits.
These codes (and their surrounding families) are listed in the official purpose-code annexures that banks and the RBI publish; the attached lists show the wording and grouping for 2025.
Purpose Code List for SaaS/IT Exporters (Quick Reference)
| Code | RBI Category | Use when the money is for… (clear, practical example) |
| P0802 | Computer & Information Services | Custom dev, implementation, integration, testing, maintenance for a US/EU client (no Softex). |
| P0807 | Computer & Information Services | Off-site software exports / SaaS subscriptions billed to foreign customers; export delivered from India. |
| P1006 | Other Business Services | Advisory/strategy/PMO for a foreign customer (not coding). |
| P1016 | Other Business Services | Market research, user studies, insight reports for a foreign brand. |
| P1014 | Other Business Services | Engineering/technical services that aren’t strictly software consultancy. |
| P1022 | Other Business Services | Highly specialized technical services not captured by any other code. |
Not exhaustive—just the purpose code list most SaaS/IT exporters actually use. For edge cases, scan the full annexure (P08 & P10 sections).
Purpose Code Examples: Live Scenarios for Export Services
- SaaS subscriptions (monthly/annual) from a US customer
Nature: Cloud software delivered entirely from India.
Pick: P0807 (Off-site Software Exports).
Invoice note: “Export of software services (SaaS) – Month/Year.” - Fixed-bid custom development project (remote)
Nature: You built and delivered a web/mobile app remotely from India.
Pick: P0802 (Software consultancy/implementation) if you’re not filing Softex. - Implementation + adoption consulting
If coding dominates, pick P0802.
If it’s largely advisory, pick P1006. - User research & market insight report
Pick: P1016 (Market research & public opinion polling). - Specialized tech/engineering service
Pick: P1014 (Engineering services) or P1022 if nothing else fits.
How to Choose and Use the Right Purpose Code (7-Step Flow)
- Name the work simply.
- Map to annexure (P08 for IT/software, P10 for consulting/research/engineering).
- Tell the payer upfront (include purpose code in invoice email).
- Mirror invoice description with the purpose code chosen.
- Provide supporting docs quickly (invoice, SoW, contract).
- Check bank advice/FIRC for the posted code.
- Standardize across similar revenue types.
Common Pitfalls with Purpose Codes (and Quick Fixes)
- Picking “Other services” too often → invites compliance queries.
- Invoice/code mismatch → always align wording with purpose code.
- Letting sender guess → always tell client which purpose code to use.
- Not replying to bank quickly → delays inward remittance.
- Confusing software exports with consulting → use P0802/P0807 for IT exports, P1006 for pure advisory.
One-Page SOP for Purpose Codes (Export Services)
- Invoice footer: Add “Suggested RBI purpose code for inward remittance: P0807 / P0802 (as applicable).”
- Payment instruction email: Tell clients which purpose code to use.
- Internal tracker: Log client, invoice, UTR, purpose code, documents.
- Weekly check: Verify bank advice/FIRC matches chosen purpose code.
Quick Reference: Where Purpose Codes Live in RBI List
- Computer & Information Services (P08) – includes P0802 (software consultancy/implementation) and P0807 (off-site software exports).
- Other Business Services (P10) – includes P1006, P1016, P1014, P1022.
(Your bank’s annexure mirrors the RBI categories; the wording may vary slightly, but the codes and intent match.)
FAQs on Purpose Code for Inward Remittance
1) Do I need a purpose code for every inward remittance?
Yes—every incoming foreign payment needs a code so the bank can report it correctly to the RBI.
2) P0802 vs P0807—which one for my SaaS?
If you export software/services from India (subscriptions, remote delivery), P0807 is typically right. If the engagement looks like custom software consulting/implementation without Softex, P0802 fits.
3) What if my payment is advisory, not coding?
Use P1006 (business & management consultancy) for strategy/advisory retainers.
4) Can I change the code after funds arrive?
Yes. If the bank posted the wrong code, request correction with invoice/SoW.
5) Where can I see the official RBI purpose code list?
In your bank’s annexure and RBI’s published purpose code schedules (see “Computer & Information Services” and “Other Business Services”).
Final Takeaway
Your goal is growth—more customers, smooth cashflow, zero compliance drama.
Purpose codes help you get there. Pick the right label once, teach your clients to use it, and make it part of your invoicing muscle memory.
The result: faster credits, cleaner records, calmer audits—and more time to build.
