EDF Filing for Service Exporters: RBI Exempts Freelancers, Sets ₹10 Lakh Limit for Firms
EDF filing for service exporters has been cut back sharply, and the relief runs from the first day of the new regime. The Reserve Bank of India has notified the Foreign Exchange Management (Export and Import of Goods and Services) (Second Amendment) Regulations, 2026, Notification No. FEMA 23(R)/(2)/2026-RB dated 2 November 2026, published in the Gazette the same day and effective from 1 October 2026. A resident individual who exports services, such as a freelancer, consultant or independent developer paid from abroad, is now treated as having submitted the Export Declaration Form (EDF) once the bank has the information it needs to credit the payment. Firms, LLPs and companies get the same deemed filing where the inward remittance for the service is not more than ₹10 lakh or its foreign-currency equivalent.
The same notification narrows the reporting of imported services. Authorised Dealer (AD) banks now have to enter import-of-service details in the Import Data Processing and Monitoring System (IDPMS) only where the importer is not a resident individual and the invoice or contract value exceeds ₹10 lakh.
What the EDF rule for services said from 1 October 2026
The Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 (Notification No. FEMA 23(R)/2026-RB dated 13 January 2026) replaced the old export and import framework from 1 October 2026. For the first time, regulation 3(2) required every exporter of services to file an EDF with the specified authority, declaring the full export value, within 30 days from the end of the month in which the invoice was raised. For services other than software, the specified authority is the AD bank in the Domestic Tariff Area and the Development Commissioner for an SEZ unit. For software, it is the AD bank or Software Technology Parks of India in the Domestic Tariff Area, and the Development Commissioner in an SEZ. The regulations state that "services" includes software.
Three reliefs were already in the text. An exporter serving one or more clients in a month could file one EDF for all of that month's exports. An exporter of services other than software could file on or before the date of receipt of payment. The AD bank could extend the filing period on a reasoned request. Even so, the rule applied regardless of size, so a student doing translation work for a single overseas client was in the same filing net as an IT company. The first amendment of 22 September 2026 then shortened the realisation period for exports to nine months from the date of invoice (twelve months where the export is invoiced or settled in rupees), which made the open entries created by each EDF more pressing to close.
Who is now deemed to have filed the EDF
The second amendment inserts a definition in regulation 2(1)(da): a "resident individual" means a person resident in India who is a natural person. It then adds two new provisos at the head of regulation 3(2), and the three existing provisos move down as (c), (d) and (e). The position for different exporters and importers of services is as follows.
| Person | Test in the amended regulations | What is required |
|---|---|---|
| Resident individual exporting services | No value limit | EDF deemed submitted once the AD bank gets the information needed to receive the payment and credit the account |
| Firm, LLP, company or other non-individual exporting services | Inward remittance for the service up to ₹10 lakh | EDF deemed submitted on the same basis as a resident individual |
| Firm, LLP, company or other non-individual exporting services | Inward remittance above ₹10 lakh | EDF within 30 days from the end of the invoice month; monthly consolidated EDF allowed |
| Resident individual importing services | No value limit | No IDPMS entry by the AD bank under regulation 18(1)(d) |
| Non-individual importing services | Invoice or contract value above ₹10 lakh | AD bank enters details as furnished by the importer within five working days of receiving them |
For a freelancer, the practical effect is that there is no separate form to prepare. The bank needs the usual particulars to credit an inward remittance, and once those are given the declaration is treated as made. The notification does not list what that information is, so the content of the request will depend on each bank's process. Payments routed through an overseas platform or a collection service remain a matter for regulation 8, under which the AD bank may allow receipts from a third party if it is satisfied about the bona fides of the transaction.
Because the amendment applies from 1 October 2026, no resident individual has missed an EDF for October invoices. Under the original rule the first monthly EDF for October 2026 invoices would have fallen due on 30 November 2026.
How the ₹10 lakh test works for firms and companies
For non-individual exporters, the threshold is tied to the inward remittance for the service, not to the annual turnover or the total billed in a month. A worked illustration with assumed figures shows the difference. A private limited design studio in Pune raises three invoices on overseas clients in October 2026: ₹3.5 lakh, ₹6 lakh and ₹14 lakh. If each invoice is paid by a separate remittance, the first two remittances are within ₹10 lakh and the EDF for those services is deemed submitted. The ₹14 lakh service is outside the proviso, so the studio still has to file an EDF for it with its AD bank by 30 November 2026, which is 30 days from the end of October. Since all three invoices were raised in the same month, it could also have used one consolidated EDF under proviso (c) for any invoices that needed formal filing.
The regulation does not say how a single remittance covering several invoices, or a part payment, is to be measured, and it does not address advance receipts where the money arrives before the invoice. A firm that bills one client ₹6 lakh a month and is paid quarterly in one ₹18 lakh remittance should take its AD bank's view in writing before relying on deemed filing. The exporter's own ₹10 lakh test is based on the remittance, while the import-side test for IDPMS is based on the invoice or contract value, so the two thresholds will not always be met or missed together.
Software exporters and SEZ units
Both new provisos speak of "the exporter of services", and the regulations define services to include software. A resident individual writing code for a foreign client is therefore covered by the deemed filing in proviso (a), and a software company is covered by proviso (b) for remittances up to ₹10 lakh. The provisos refer to information given to the Authorised Dealer. Where a software exporter's specified authority is STPI, or an SEZ unit files with the Development Commissioner, the text does not say how deemed submission to an AD bank interacts with that route, and those exporters should continue filing with their specified authority until the position is clarified. Proviso (d), which lets non-software exporters file on or before receipt of payment, continues to exclude software.
Import of services and IDPMS entries
Regulation 18(1)(d) originally required AD banks to enter the details of every import of services in IDPMS as declared and submitted by the importer, within five working days of receiving the documents. The substituted clause limits this to importers other than resident individuals whose invoice or contract value exceeds ₹10 lakh, with the five working days running from receipt of the details. An individual paying for an overseas course, software subscription or consultancy falls outside this entry altogether, and so does a business importing services under a contract of ₹10 lakh or less. Payment for the import itself still follows the other provisions of the regulations.
What stays the same for service exporters
Deemed filing removes a form, not the obligations attached to the export. Proceeds still have to be realised and repatriated within nine months from the date of invoice, or twelve months for rupee invoicing or settlement, unless the AD bank extends the period on a reasoned request. The export entry in the Export Data Processing and Monitoring System still has to be closed on realisation. For exports up to ₹10 lakh per invoice, regulation 4(2) lets the entry be closed on the exporter's declaration that payment has been realised in full or otherwise, and exporters may give a quarterly declaration for bulk closure. Regulation 6 similarly allows a reduction in export value, including non-realisation, on the exporter's declaration for exports up to ₹10 lakh per invoice.
For practitioners, the review for each client now runs in this order: whether the exporter is a resident individual; if not, which receipts exceeded ₹10 lakh; and for those, whether an EDF was filed within 30 days after the invoice month. Firms and companies with October 2026 invoices above that level still face the 30 November 2026 filing date. Banks have yet to publish the information they will ask for under the deemed-filing route, and that is the next thing to watch at each client's AD bank.
Official source: View the official source document
