New FEMA rules: RBI clarifies what freelancers and small exporters need to report; FAQs to be released soon | Mint
New FEMA rules: RBI clarifies what freelancers and small exporters need to report; FAQs to be released soon
RBI has clarified reporting rules under the new FEMA trade regulations effective 1 October. Individuals are not required to report personal imports or exports, while small exporters with bills up to ₹10 lakh can use self-declaration and an invoice.
New FEMA trade rules that came into effect from 1 October have triggered concerns among freelancers, content creators and small service exporters over whether they now need to file additional export declarations for payments received from overseas.
The Reserve Bank of India (RBI) has now clarified that individuals undertaking transactions of a personal nature are not covered by these reporting requirements.
RBI Governor Sanjay Malhotra and Deputy Governor Rohit Jain made the clarification at the October monetary policy press conference. The RBI also said small exporters with transactions of up to ₹10 lakh per bill can use a self-declaration and invoice, while banks and authorised dealers, rather than individual exporters and importers, will handle reporting on the IEDPMS portal.
Are individuals required to report their personal imports and exports?
Rohit Jain, Deputy Governor, RBI, said the new trade regulations are intended to liberalise the handling of trade matters by authorised dealers, simplify processes and promote ease of doing <a s new rule for freelancers, YouTubers: What changed from October 1
Jain said there appeared to be some misunderstanding about the reporting obligations and that the RBI would clarify the requirements through an FAQ.
Governor Sanjay Malhotra further clarified that individuals, whether undertaking imports or exports, are not required to report such transactions irrespective of the amount when they are of a personal nature.
This can include subscribing to a TV channel, an app, journals or newspapers. It can also cover individuals providing services abroad, such as tutoring or small software services, and receivingpaymentsfor those services, Malhotra said.
What about small exporters?
The RBI also clarified the process for small exporters.
For exports of up to ₹10 lakh per bill, a self-declaration along with an invoice will suffice, Malhotra said. The ₹10 lakh limit applies per bill and not annually. He clarified that this is an alternative to the more detailed reporting process rather than an exemption from providing information.
This means small exporters with individual bills within the ₹10 lakh threshold can use the self-declarationroutealong with the invoice.
Do freelancers and exporters have to report directly?
Another key clarification concerns the reporting mechanism.
Malhotra said reporting on the IEDPMS portal is to be undertaken by banks and authorised dealers rather than individual exporters and importers.
“Reporting is to be done by thebanksand the ADs, by the intermediaries, and not by the individual exporters and importers,” Malhotra said.
Exporters and importers therefore need to provide the required information to their banks or authorised dealers, which will undertake the reporting.
Malhotra said some of this information was already being provided by customers when making payments, including a purpose code and other details. The new framework requires some additional information, which the RBI said would improve data reporting and the availability of data on services exports.
Why has RBI brought in the new trade rules?
Jain said the new trade regulations were issued in January, sufficiently ahead of their 1 October implementation, with the broader objective of simplifying trade processes.
The RBI said the regulations are intended to liberalise the handling of trade matters by authorised dealers, simplify processes and promote ease of doing consumer-centric storytelling, enabling readers to better understand fund positioning, portfolio changes and long-term investment opportunities.<br><br> Kirti holds a Bachelor’s degree in Economics from Indraprastha College for Women, University of Delhi, and a Master’s in Finance from the Jindal School of Banking & Finance at O.P. Jindal Global University. Her academic training emphasised analytical thinking, quantitative research and financial decision-making, providing a strong foundation in understanding capital markets, financial systems and economic policy. With a combined experience in investment research and financial journalism, she is committed to producing accurate, accessible and insightful journalism that empowers readers to make well-informed financial decisions.
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