Notification No. FEMA 23(R)/(2)/2026-RB | Dated 2 November 2026 | Effective 1 October 2026
Summary: The Reserve Bank of India has amended the FEMA export and import framework applicable from 1 October 2026 to simplify Export Declaration Form (EDF) compliance for exporters of services. A resident individual is deemed to have submitted the EDF when the information required for receipt of payment is provided to an Authorised Dealer (AD) for crediting the exporter’s account, without a monetary ceiling under the new proviso. For exporters other than resident individuals, including companies, LLPs and firms, the same treatment applies if the inward remittance for the service does not exceed ₹10 lakh or its foreign-currency equivalent. The notification, dated 2 November 2026, expressly takes effect from 1 October 2026.
The critical distinction is between deemed submission and complete exemption. Qualifying exporters need not treat a separate EDF form as the only way to meet the declaration requirement, but they must provide the necessary receipt information to the AD. Other FEMA obligations, including transaction verification, monitoring and realisation of export proceeds, remain relevant. The amendment also narrows specified IDPMS service-import reporting to non-individual importers where the invoice or contract value exceeds ₹10 lakh. The article explains the rule, examples, unresolved instalment questions and compliance steps.
- 1. Background: EDF Requirements Introduced from October 2026
- 2. What Exactly Changed on 2 November 2026?
- 3. Meaning of “Exporter of Services Shall Be Deemed to Have Submitted the EDF”
- Simple Illustration
- 4. Resident Individuals: No ₹10 Lakh Ceiling
- 5. Companies, LLPs and Firms: ₹10 Lakh Inward-Remittance Test
- What If a ₹24 Lakh Invoice Is Paid in Three ₹8 Lakh Instalments?
- 6. Practical Examples
- 7. Does the Original EDF Deadline Still Matter?
- 8. Does Deemed EDF Apply to Software Exports?
- 9. EDF Submission Is Not the Same as Export Proceeds Realisation
- 10. AD Bank Reporting and EDPMS Reconciliation
- 11. Separate ₹10 Lakh Change for Service Imports
- 12. Compliance Checklist for Exporters
- 13. Frequently Asked Questions
- Has RBI abolished EDF for all service exporters?
- What does “deemed to have submitted” mean?
- Is there a ₹10 lakh limit for a resident individual?
- Is ₹10 lakh an annual turnover limit for companies?
- Does the rule apply to exactly ₹10 lakh?
- Can a company split a ₹30 lakh invoice into smaller receipts?
- Are GST zero-rating and income-tax rules changed?
- When does the amendment apply?
- 14. Conclusion
1. Background: EDF Requirements Introduced from October 2026
Under Regulation 3(2) of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, exporters of services generally declare the full export value through an Export Declaration Form within 30 days from the end of the month in which the invoice is raised. The framework expressly includes software within services. The original EDF compliance framework for services and the October 2026 EDF filing guidance must now be read subject to the Second Amendment. Earlier statements that every service exporter must separately file a monthly EDF without exception are no longer complete.
2. What Exactly Changed on 2 November 2026?
| Issue | Amended position effective 1 October 2026 |
|---|---|
| Resident individual exporting services | EDF deemed submitted on furnishing required receipt information to the AD for crediting the account; no specific monetary ceiling. |
| Exporter other than a resident individual | Same deemed-submission treatment where the inward remittance for the service is not more than ₹10 lakh or foreign-currency equivalent. |
| Other export transactions | Ordinary EDF rules and relevant existing provisos continue to apply. |
| Import of services by resident individual | Outside the particular IDPMS service-import entry requirement in amended Regulation 18(1)(d). |
| Import of services by other persons | AD enters service-import details in IDPMS where invoice or contract value exceeds ₹10 lakh, within five working days of receiving details. |
3. Meaning of “Exporter of Services Shall Be Deemed to Have Submitted the EDF”
The words “shall be deemed to have submitted the EDF” create a legal fiction: once the statutory conditions are satisfied, the exporter is treated as though the EDF has been submitted, even though the exporter has not necessarily filed a separate document labelled EDF. This is a statutory method of satisfying the declaration requirement, not a blanket waiver of all reporting or banking formalities.
For the new mechanism to operate, the exporter must (i) be an eligible category of exporter, (ii) provide information required in relation to receipt of payment for the exported service to the AD, and (iii) provide it for crediting the exporter’s account. A non-individual exporter must also satisfy the ₹10 lakh inward-remittance ceiling. Merely raising an invoice, receiving an informal payment confirmation, or assuming that the bank already knows the transaction is insufficient to establish compliance with these conditions.
Simple Illustration
A resident freelance designer sends an invoice to an overseas client and receives payment through an AD bank. The bank requests the payer’s name, purpose of remittance, invoice particulars and other information needed to credit the amount. Once the individual provides the required information in connection with crediting that service receipt, the regulation treats the EDF as submitted. The individual does not have to establish compliance only by separately lodging another EDF, although the AD may require supporting information under its applicable procedures.
Important: Deemed submission is not the same as saying that an EDF never existed, that no information is required, or that the bank cannot seek invoices or supporting records. It means the law recognises an alternative way to fulfil the EDF submission requirement.
4. Resident Individuals: No ₹10 Lakh Ceiling
The notification defines a “resident individual” as a person resident in India who is a natural person. This category is distinct from a company, LLP or partnership. It depends on residence under FEMA, not merely Indian citizenship. A resident individual providing services to a foreign customer can qualify under the new proviso irrespective of whether the service remittance is ₹2 lakh, ₹10 lakh or ₹25 lakh, provided the other conditions are met.
Example: A resident consultant receives ₹28 lakh for an overseas advisory assignment and furnishes the required receipt information to the AD for crediting the account. The new proviso does not impose a ₹10 lakh ceiling on this individual. However, the bank’s verification and the separate FEMA realisation and reporting rules still apply.
5. Companies, LLPs and Firms: ₹10 Lakh Inward-Remittance Test
For exporters other than resident individuals, the statutory condition is that the value of the inward remittance for the service must not be more than ₹10 lakh or its foreign-currency equivalent. Thus, an eligible company receiving ₹8 lakh for an exported service may rely on deemed EDF submission after furnishing the required information. An LLP receiving ₹10 lakh may also fall within the wording “not more than”. A company receiving ₹14 lakh for a service cannot rely on this proviso for that receipt.
The regulation uses the expression “inward remittance for such service”. It does not state that ₹10 lakh is an annual turnover ceiling. Equally, it does not expressly establish an unrestricted right to split a larger service invoice into smaller instalments to secure deemed submission for the whole transaction.
What If a ₹24 Lakh Invoice Is Paid in Three ₹8 Lakh Instalments?
This is a genuine interpretation and implementation question. Each payment is individually below ₹10 lakh, but all three relate to one larger service transaction. The wording does not expressly settle how instalments should be aggregated or treated for this purpose. Non-individual exporters should avoid treating artificial splitting as an automatic exemption and obtain a documented view from their AD based on applicable RBI instructions.
6. Practical Examples
| Exporter and receipt | Likely position under new provisos |
|---|---|
| Resident individual freelancer, ₹3 lakh | Deemed EDF on furnishing required receipt information to AD. |
| Resident individual consultant, ₹30 lakh | Deemed EDF can apply; no monetary cap specified for individuals. |
| Private limited company, ₹7 lakh | Deemed EDF can apply, subject to required information. |
| LLP, exactly ₹10 lakh | Within “not more than ₹10 lakh”, subject to conditions. |
| Partnership firm, ₹12 lakh | Not eligible under the new ₹10 lakh deemed-submission proviso for that receipt. |
| Company, ₹24 lakh invoice in three ₹8 lakh receipts | Instalment treatment not expressly resolved; seek AD clarification. |
7. Does the Original EDF Deadline Still Matter?
Yes, particularly for transactions outside the deemed-submission provisions. Regulation 3(2) ordinarily requires EDF submission within 30 days from the end of the invoice month. Its other provisos permit a consolidated monthly EDF; permit an exporter of services other than software to submit EDF on or before receipt of payment; and permit an AD to extend the submission period on a reasoned request. The November amendment inserted two new provisos and renumbered these existing provisions. It did not repeal them.
For qualifying exporters, the new mechanism should be read as a separate statutory route to deemed submission. The notification does not provide comprehensive operational guidance on every timing scenario where payment arrives after the ordinary declaration period. Exporters should promptly provide the relevant information and seek AD clarification where the timing creates uncertainty.
8. Does Deemed EDF Apply to Software Exports?
The 2026 regulations expressly provide that services include software, subject to their definitions and applicable specified-authority arrangements. Accordingly, software exporters should consider the new provisos as part of the service-export framework. However, the separate existing facility allowing EDF submission on or before payment is expressly limited to services other than software. These are different provisions and should not be conflated. See the TaxGuru analysis of software exports and specified authorities.
9. EDF Submission Is Not the Same as Export Proceeds Realisation
Even when the EDF is deemed submitted, the exporter remains subject to separate realisation, repatriation and monitoring requirements. Under Regulation 5, as amended in September 2026, export proceeds for services ordinarily must be realised and repatriated within nine months from the invoice date; the prescribed period is twelve months for exports invoiced or settled in Indian rupees, subject to the regulation and permissible extensions. These export-realisation changes are independent of the November EDF simplification.
Similarly, the ₹10 lakh declaration-based EDPMS closure facility under Regulation 4 is a separate provision based on shipping-bill or invoice value. It should not be confused with the new ₹10 lakh inward-remittance condition for deemed EDF submission.
10. AD Bank Reporting and EDPMS Reconciliation
Regulation 18 continues to impose EDPMS reporting, remittance recording, monitoring and closure obligations on ADs. The Second Amendment does not abolish those requirements. Banks should adapt their internal processes so that the required payment information supplied by qualifying exporters is handled consistently with deemed EDF submission and relevant EDPMS obligations. Regulation 19 separately requires ADs to maintain documented policies and standard operating procedures for foreign-trade transactions.
11. Separate ₹10 Lakh Change for Service Imports
Amended Regulation 18(1)(d) addresses service imports, not EDF submission for exports. An AD is required to enter details of import of services in IDPMS within five working days of receiving the details where the importer is a person other than a resident individual and the invoice or contract value exceeds ₹10 lakh or its equivalent. This is an invoice-or-contract-value test, unlike the inward-remittance test for non-individual service exporters.
The amended clause excludes resident individuals and qualifying lower-value imports from that particular IDPMS entry requirement; it does not waive other applicable FEMA requirements for import payments. For context, see FEMA reporting and reconciliation obligations.
12. Compliance Checklist for Exporters
- Determine whether the exporter is a resident individual or another person under FEMA.
- Identify each service export, invoice, client and remittance.
- For non-individual exporters, test the relevant inward remittance against ₹10 lakh or foreign-currency equivalent.
- Provide the AD with the information required to credit the service-export payment and retain evidence of submission.
- Do not assume that dividing a larger invoice into smaller payments automatically establishes eligibility.
- Reconcile receipts with invoices, bank records and applicable EDPMS entries.
- Monitor realisation deadlines separately from EDF submission.
- Check the AD’s published procedures and obtain clarification for instalments, unusual payment channels and timing issues.
13. Frequently Asked Questions
Has RBI abolished EDF for all service exporters?
No. It has introduced deemed submission for specified exporters when statutory conditions are met. Ordinary EDF provisions continue for other cases.
What does “deemed to have submitted” mean?
It means the exporter is legally treated as having submitted the EDF when the required receipt information is furnished to the AD for crediting the exporter’s account, without necessarily submitting a separate EDF form.
Is there a ₹10 lakh limit for a resident individual?
No monetary ceiling is specified in the new resident-individual proviso.
Is ₹10 lakh an annual turnover limit for companies?
No annual turnover test is stated. The wording refers to the value of inward remittance for the service.
Does the rule apply to exactly ₹10 lakh?
Yes, the wording “not more than ₹10 lakh” includes exactly ₹10 lakh, subject to other conditions.
Can a company split a ₹30 lakh invoice into smaller receipts?
The notification does not expressly resolve aggregation of instalments. Splitting should not be assumed to secure deemed submission; obtain AD guidance.
Are GST zero-rating and income-tax rules changed?
No. This notification amends FEMA declaration and reporting rules. GST and income-tax obligations require independent analysis.
When does the amendment apply?
The notification is dated 2 November 2026 and expressly takes effect from 1 October 2026.
14. Conclusion
Notification No. FEMA 23(R)/(2)/2026-RB provides meaningful procedural relief: a resident individual exporting services can satisfy the EDF requirement by supplying the required payment information to the AD, without a prescribed monetary ceiling; non-individual exporters receive similar treatment for inward remittances not exceeding ₹10 lakh. The central concept is deemed submission, not unconditional exemption. Exporters should preserve evidence of the information provided, continue to monitor realisation and reporting obligations, and seek clarification for transactions involving larger invoices paid in instalments.
Related TaxGuru Reading: EDF declaration framework from 1 October 2026; Practical EDF filing guide; FEMA 2026 changes; Exports, imports, EDPMS and IDPMS under the new framework.
