A purpose code is the RBI code your bank attaches to every inward foreign remittance to record why the money came in — software consultancy, advertising, legal services and so on. To pick the right one, start from what you actually sold, match it to the closest code description, and confirm the code with your bank before the first payment arrives. For exporters it matters because the code shows up on your FIRA, feeds your bank's EDPMS matching and supports your GST export claims; a wrong code is easy to prevent and tedious to fix.
Key takeaways
- The purpose code describes the nature of the inward payment; it should match the service on your invoice.
- Common service export codes include P0802, P0807, P1004, P1005, P1006, P1007, P1008 and P1009.
- Your bank applies the code, often after asking you; tell it up front.
- Check the code on every FIRA and correct mistakes quickly.
- Use one code per type of service consistently across invoices, FIRAs and your EDF records.
Common codes for service exporters
These are the codes service exporters most often meet. Descriptions are shortened; always confirm the exact code with your bank.
| Code | Description (short) | Typical exporters |
|---|---|---|
| P0802 | Software consultancy / implementation | IT services, Salesforce/SAP partners, dev shops |
| P0807 | Off-site software exports | Product or development work delivered from India |
| P1004 | Legal services | Law firms, LPO providers |
| P1005 | Accounting, auditing, bookkeeping and tax consulting | CA firms, bookkeeping outsourcing |
| P1006 | Business and management consultancy and public relations | Management consultants, PR agencies |
| P1007 | Advertising, trade fair, market research and public opinion polling | Ad agencies, market research, influencer campaigns |
| P1008 | Research and development services | R&D, product research, some engineering research |
| P1009 | Architectural, engineering and other technical services | Architects, engineering design, technical consulting |
RBI's full list runs to many more codes, covering transport, travel, royalties, investments and personal transfers. If your service doesn't fit any of the above cleanly, ask your bank which code applies rather than forcing a near match.
Picking your code in five steps
- Describe your service in one plain sentence. "We design and build web applications for clients abroad." Not "digital solutions".
- Find the closest code description. For that sentence, P0802 or P0807 are candidates.
- Split by service line if needed. A firm that does both consulting (P1006) and software builds (P0802) may need different codes for different invoices.
- Check consistency with your SAC. If your invoice says SAC 998314 (IT design and development), a purpose code for advertising would look odd.
- Confirm with your bank before the first payment. A short email: "We will receive payments for software development services from clients in the US. Please confirm the purpose code you will apply." Keep the reply.
Our free purpose code finder takes your service description and suggests likely codes to discuss with your bank.
A worked example: one firm, two codes
Prism & Pine Advisory LLP, a fictional Gurugram firm, does two things for overseas clients: market-entry strategy (consulting) and customer surveys (market research). In October 2026 it raised:
| Invoice | Client | Service | SAC (CA confirmed) | Likely purpose code |
|---|---|---|---|---|
| PPA/E/26-27/021 | Fjord Outdoor AS, Norway | India market-entry strategy | 998311 (management consulting) | P1006 |
| PPA/E/26-27/022 | Fjord Outdoor AS, Norway | Consumer survey, 1,200 respondents | 998371 (market research) | P1007 |
| PPA/E/26-27/023 | Halcyon Tea Co, UK | Distributor-selection advisory | 998311 | P1006 |
Prism & Pine told its bank in advance that payments would come under two codes and asked clients to pay each invoice separately with the invoice number in the reference. When the Norwegian client paid both invoices in a single wire, the bank asked which code to apply; Prism & Pine replied with the split and the invoice numbers, and the bank recorded it correctly.
All three invoices went on one October EDF, due 30 November 2026. The purpose code isn't a field on the EDF itself, but it's on the FIRA your bank uses to match payments to those EDF rows.
Where purpose codes cause trouble
| Problem | Why it happens | Effect |
|---|---|---|
| Generic or wrong code applied | Bank didn't know the nature of the payment | Mismatch with invoice; questions at GST refund time |
| Personal-transfer code on a business receipt | Client paid as if sending a gift or family support | Payment may not be treated as export proceeds |
| One code for mixed services | Single wire paid several invoices | Some invoices recorded under the wrong code |
| Code changes month to month | No agreed code with the bank | Inconsistent records; harder reconciliation |
The personal-transfer problem is worth stressing. If an overseas client pays through a consumer remittance service and picks a "family maintenance" type purpose, the money may land coded as a personal remittance. That doesn't help you show an export. Ask clients to pay as a business payment for services.
Our article on purpose code mistakes that cause trouble later goes through more cases.
Fixing a wrong code
If a FIRA shows the wrong code:
- Write to your bank promptly, quoting the remittance date, amount, remitter and the invoice it relates to.
- State the nature of the service and the code you believe applies.
- Attach the invoice and, if helpful, the contract.
- Ask for a corrected FIRA or advice.
Our purpose code correction letter is a ready format. Banks can be slower to correct codes on old remittances, so check every FIRA when it arrives.
This is general information, not legal or tax advice.
Frequently asked questions
What is a purpose code in a foreign remittance?
It's an RBI code that records the reason for a cross-border payment, such as software consultancy or advertising services. Your bank attaches it to each inward remittance and it appears on your FIRA or bank advice.
Who decides the purpose code — me or the bank?
The bank applies the code, but it relies on information about the payment, often from you. Tell your bank the nature of your services before payments start and confirm the code it will use.
Which purpose code should a software company use?
P0802 (software consultancy/implementation) and P0807 (off-site software exports) are the usual candidates. Which fits depends on the nature of your work, so confirm with your bank.
Does the purpose code go on the EDF?
The EDF doesn't have a purpose code field. But the code appears on the FIRA your bank uses to match payments to your EDF invoices, so it should be consistent with the service described in Part 2B.
Can a wrong purpose code be corrected later?
Usually yes, by writing to your bank with the invoice and an explanation. Corrections are easier when requested soon after the payment, so check every FIRA when you receive it.
Bottom line
Choose your purpose code from what you sold, confirm it with your bank once, and check it on every FIRA. Start with our free purpose code finder, and pair it with the SAC code finder so your invoice and remittance tell the same story.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.