A Foreign Inward Remittance Certificate (FIRC) is a document issued by an Indian bank when foreign currency lands in an account. It certifies the amount, the purpose (services / advance / etc.), the sender, and the date. For Indian contractors providing services to foreign clients, FIRCs are the documentary proof of foreign-source income.
What FIRC actually proves
- Foreign currency receipt was lawful and routed through banking channels.
- Source of funds is identified (the foreign payer).
- Purpose code aligned with services rendered (typically 'P0802' for software services).
- Amount in original currency and INR equivalent.
- Conversion rate used.
Why contractors care about FIRC
- GST export-of-services treatment — zero-rated supply requires FIRC documentation.
- Input GST credit refund — contractor's claim is supported by FIRC.
- Income tax filing — proof of foreign-source professional income.
- Bank loan applications — proof of income for personal loans, home loans.
- Visa applications — proof of overseas income for tourist / business visas.
How FIRC is obtained
- Bank issues automatically for most foreign currency credits.
- Some banks require explicit request — contractor logs into net-banking and downloads.
- Wise issues e-FIRC for many transactions (varies by bank receiving the payout).
- Payoneer issues equivalent documentation.
- Cost: typically ₹100-500 per FIRC; some banks free.
FIRC tracking included in Contractor plan
FastLegal's Contractor plan tracks FIRCs for each payment the contractor receives, ensures the purpose code is correct, and uses them in the contractor's quarterly GST and annual ITR filings. The contractor doesn't have to chase the bank for documents.
What foreign payers can do to make it easier
- Reference the invoice number in the wire's remitter information.
- Use a consistent purpose description (e.g. 'software development services').
- Send payment from the same originating account each time (helps bank trace).
- If using Wise / Payoneer, confirm the contractor's receiving rail supports FIRC.
- Provide a brief annual statement of payments — useful supporting documentation.
Common FIRC issues
- Bank issues FIRC with wrong purpose code — request correction (formal letter to bank).
- Missing FIRC for an old payment — bank can usually reissue if requested within 5 years.
- Wise transactions where FIRC isn't auto-issued — request via Wise support; varies by destination bank.
- FIRC issued in name of contractor's previous bank account — request reissue to current account.
Frequently asked questions
Can the contractor file taxes without FIRCs?+
Yes — FIRC isn't strictly mandatory for income tax filing. But for GST export treatment and audit defence, FIRCs are strongly recommended. Most contractors maintain them.
Do we (foreign payer) issue anything similar?+
No — FIRC is bank-issued in India. We provide invoices and remittance instructions; the bank generates the FIRC.
What if our contractor's payment lands without FIRC?+
Contractor requests bank for the FIRC. Most banks accommodate within 5-15 days. Don't change payment rail until the issue is resolved.
Is the FIRC valid forever?+
Yes — once issued, FIRC is permanent documentation. No expiry. Keep for at least 8 years for audit purposes.
Stop reading circulars. Start running clean payroll.
Every FastLegal plan ships with a dedicated payroll consultant — a real human who runs your PF, ESI, PT, TDS and Form 16 issuance, configured to your salary structure, your state, and your hiring plan. You sign off. We do the rest.