What Is the P1401 Purpose Code?

The P1401 purpose code covers pay received from abroad as an employee. RBI lists P1401 in group 14, Primary Income, with the description "Compensation of employees". The deciding point is the relationship. An employee is paid salary or wages by an employer, which differs from a freelancer who invoices a client. AD banks report the code under FETERS, as set out in A.P. (DIR Series) Circular No. 84 of February 29, 2012. Under Regulation 18(2) of the 2026 Export and Import Regulations, FETERS reporting continues.

P1401 vs P0802: P0802 is "Software consultancy/implementation (other than those covered in SOFTEX form)" in the services group. A software professional paid as an employee fits P1401. The same person paid as an independent contractor on invoices is selling a service. The RBI list does not define the test, so ask your AD bank if your contract is unclear.

Use the P1401 purpose code when pay for work as an employee comes into India from an employer abroad. The deciding question is whether you are an employee or an independent service provider. The RBI purpose code list has services codes for invoiced work, so check the alternatives below before you choose P1401.

• Use P0802 instead: Use P0802 (Software consultancy/implementation (other than those covered in SOFTEX form)) when you invoice a foreign client for software work as a contractor.
• Use P1006 instead: Use P1006 (Business and management consultancy and public relations services) when you invoice a foreign client for consulting as a contractor.
• Use P1499 instead: Use P1499 (Other income receipts) when the receipt is other primary income that no listed code describes.

The P1401 purpose code is used by resident individuals who receive salary, wages or similar pay from an employer abroad, for example remote employees of foreign companies. The recipient declares P1401 to the bank or provider that credits the funds.

• For example, a project manager in Hyderabad is on the payroll of a company in the Netherlands and is paid a monthly salary into an Indian account, declared under P1401.
• For example, a seafarer who is a resident of India receives wages from a foreign shipping employer, declared under P1401.
• Say a remote support executive in Indore is employed by a company in Australia and receives pay through its payroll, declared under P1401.
• Say an engineer in Pune is paid wages for a short assignment by an employer in Germany, declared under P1401.

• You invoice a foreign client for freelance software work as an independent contractor. Use P0802 (Software consultancy/implementation (other than those covered in SOFTEX form)) or another services code that matches the work.
• A relative abroad sends you money for household costs. Use P1301 (Inward remittance from Indian non-residents towards family maintenance and savings).
• You receive dividends on shares you hold in a foreign company. Use P1412 (Inward remittance of dividends on account of Portfolio Investment made abroad by India on equity and investment fund shares).
• A foreign consulting client pays your professional fee on an invoice. Use P1006 (Business and management consultancy and public relations services).

For the P1401 purpose code, the core documents are the employment contract and salary slips. There is no export invoice, because pay for employment is not an export of services. Keep records that show the employer, the period and the amount. The 2026 Export and Import Regulations apply to exports and imports of goods and services, so the Export Declaration Form is for invoiced services and not for salary.

• Contract: Keep the employment contract or offer letter that shows the foreign employer and the terms of pay.
• Salary slips: Keep salary slips or payroll statements that show gross pay, deductions and the pay period.
• Credit advice: Keep the bank's credit advice showing the amount, currency, date and purpose code.
• Tax records: Keep any tax deduction statement from the employer, as it helps when you file your return.

1. Check your contract to confirm you are an employee paid salary or wages, and not a contractor who invoices.
2. Open the inward payment in your bank's portal, app or branch form when the funds arrive or when you are asked for the purpose.
3. Select P1401 from the purpose code list, or write the code and its description if the form asks for text.
4. Add the employer's name and the pay period in any remarks field so the payment can be matched.
5. Confirm the code shown on the credit advice is P1401, and ask your bank to correct it if it is wrong.

• FIRA/FIRC: Your bank or provider records the purpose on the inward remittance advice or certificate it issues. Check with your AD bank on the exact format, and keep it with the salary slip for the same month.
• GST: Pay for employment is not a supply by you, so export of services under section 2(6) of the IGST Act does not arise for salary. If you also run a separate business that invoices clients, that income follows its own GST position.
• Income tax: The purpose code does not decide how the pay is taxed. The Income-tax Act, 2025 replaced the 1961 Act from April 01, 2026. Ask a tax professional how foreign salary is taxed for you and which year's rules apply.

• Contractor mix-up: Declaring P1401 for invoiced contract work. Independent service providers use a services code that matches the work.
• Employee mix-up: Declaring a services code for payroll salary when you are an employee.
• Family money: Using P1401 for money from relatives, where P1301 or P1302 describes the receipt.
• Investment income: Using P1401 for dividends or interest, where the P1403 to P1412 codes describe investment income.
• Catch-all: Using P1499 (Other income receipts) when P1401 describes the pay.
• Wrong direction: Using P1401 for money you send out of India. Payments out of India use S codes. See what a wrong code can lead to.

The code, its official description and every rule on this page are linked to RBI and other official sources, checked on the dates below.

1. RBI: Guidelines for Submission of Data, Foreign Exchange Transactions Electronic Reporting System (FETERS), purpose code list, Group 14 Primary Income: P1401, P1403, P1405, P1409, P1411, P1412, P1499; Group 13 P1301; Group 08 and 10 codes P0802, P1006 (checked 9 Oct 2026)
2. RBI A.P. (DIR Series) Circular No. 84 dated February 29, 2012: Compilation of R-Returns, Reporting under FETERS, Paragraph 3: AD banks to report all foreign exchange transactions as per the revised purpose code list from April 2012 (checked 9 Oct 2026)
3. RBI Notification No. FEMA 23(R)/2026-RB: Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (amended up to September 22, 2026), Regulation 1(2) (in force from October 01, 2026); 18(2) (FETERS reporting) (checked 9 Oct 2026)
4. IGST Act, 2017, Section 2: Definitions (CBIC tax information portal), Section 2(6): export of services (checked 9 Oct 2026)
5. Income Tax Department e-filing portal: Objective and scope of the New Act, FAQ 2: the 1961 Act stands repealed on 01.04.2026 (checked 9 Oct 2026)