Summary: The Reserve Bank of India (RBI), through Notification No. FEMA 23(R)/(2)/2026-RB dated 2 November 2026, has amended the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, with effect from 1 October 2026. The amendment simplifies Export Declaration Form (EDF) compliance for service exporters and Import Data Processing and Monitoring System (IDPMS) reporting for service imports. Under amended Regulation 3(2), resident individuals exporting services are deemed to have submitted the EDF when they provide the information required by their Authorised Dealer (AD) Bank for crediting the inward remittance, irrespective of the amount. For exporters other than resident individuals, including companies, LLPs and firms, this facility is available where the inward remittance for the service does not exceed ₹10 lakh or its foreign-currency equivalent. Other cases remain subject to applicable EDF filing requirements. Under amended Regulation 18(1)(d), AD Banks must enter service-import details in IDPMS where the importer is not a resident individual and the invoice or contract value exceeds ₹10 lakh. The prescribed reporting period is five working days after receipt of details. The export threshold is based on inward remittance value, whereas the import threshold is based on invoice or contract value. The changes reduce routine reporting without eliminating underlying FEMA compliance obligations. Questions remain regarding bank-specific information requirements and instalment receipts against invoices exceeding ₹10 lakh.
- Introduction
- Deemed Submission of EDF for Export of Services
- Resident Individual Exporters: No Monetary Limit
- Companies, LLPs and Firms: ₹10 Lakh Remittance Limit
- IDPMS Reporting for Import of Services
- Reporting for Non-Individual Importers Above ₹10 Lakh
- Difference Between EDF and IDPMS Thresholds
- Practical Examples
- Individual Freelancer Receives ₹12 Lakh
- Indian Company Receives ₹9 Lakh
- Indian LLP Receives ₹15 Lakh
- Indian Company Imports Services Worth ₹8 Lakh
- Indian Company Imports Services Worth ₹18 Lakh
- Matters Requiring Clarification
- Information Required by AD Banks
- Multiple Remittances Against One Invoice
- Compliance Implications
- Conclusion
Introduction
The Reserve Bank of India notified the Foreign Exchange Management (Export and Import of Goods and Services) (Second Amendment) Regulations, 2026, through Notification No. FEMA 23(R)/(2)/2026-RB dated 2 November 2026. The amendments take effect from 1 October 2026, although the notification was issued later.
The changes concern deemed submission of the EDF for service exports, a ₹10 lakh inward-remittance limit for non-individual service exporters, and a revised threshold for IDPMS reporting of service imports. The amendment also defines a resident individual as a person resident in India who is a natural person.
Deemed Submission of EDF for Export of Services
Resident Individual Exporters: No Monetary Limit
Under the inserted proviso (a) to Regulation 3(2), a resident individual exporting services is deemed to have submitted the EDF upon providing the AD Bank with the information required in relation to receipt of payment for the services, for crediting the exporter’s account. No ₹10 lakh ceiling applies to this category.
For example, a resident individual consultant receiving ₹15 lakh from an overseas client may qualify for deemed EDF submission upon providing the required information to the AD Bank. This does not dispense with other applicable FEMA requirements, including realisation and receipt of export proceeds.
Companies, LLPs and Firms: ₹10 Lakh Remittance Limit
Under inserted proviso (b) to Regulation 3(2), exporters of services other than resident individuals are deemed to have submitted the EDF where the inward remittance for the service does not exceed ₹10 lakh or its foreign-currency equivalent, upon furnishing the information required by the AD Bank for crediting the payment.
For example, an Indian company receiving ₹8 lakh for exported software services may qualify for deemed EDF submission. Where the inward remittance exceeds ₹10 lakh, this particular deeming facility is unavailable, and the exporter must follow otherwise applicable EDF submission requirements. Under the principal framework, the ordinary EDF submission timeline for relevant service exports is 30 days from the end of the month in which the invoice is raised, subject to applicable provisions and exceptions.
IDPMS Reporting for Import of Services
Reporting for Non-Individual Importers Above ₹10 Lakh
Amended Regulation 18(1)(d) requires the AD Bank to enter service-import details in the Import Data Processing and Monitoring System (IDPMS) where the importer is a person other than a resident individual and the invoice or contract value exceeds ₹10 lakh or its foreign-currency equivalent. The entry must be made within five working days of receiving the relevant details.
The specified IDPMS reporting requirement therefore does not apply to resident individual importers or to other importers where the relevant invoice or contract value does not exceed ₹10 lakh. This is a relaxation of the specified reporting requirement, not a general exemption from FEMA rules governing outward remittances and service imports.
Difference Between EDF and IDPMS Thresholds
| Particulars | Export of Services: EDF | Import of Services: IDPMS |
|---|---|---|
| Provision | Regulation 3(2) | Regulation 18(1)(d) |
| Resident individuals | Deemed EDF submission without monetary ceiling | Specified IDPMS reporting not required |
| Other persons | Deemed submission where inward remittance does not exceed ₹10 lakh | Reporting where invoice or contract value exceeds ₹10 lakh |
| Threshold basis | Inward remittance value | Invoice or contract value |
| Responsible party | Exporter furnishes required information to AD Bank | AD Bank records applicable import details |
| Timeline | Ordinary EDF deadline applies where separate filing is required | Five working days after AD Bank receives details |
Practical Examples
Individual Freelancer Receives ₹12 Lakh
A resident individual providing consultancy services to an overseas customer receives ₹12 lakh. The exporter qualifies for deemed EDF submission upon furnishing the required information to the AD Bank; the ₹10 lakh limit does not apply.
Indian Company Receives ₹9 Lakh
An Indian company exports software development services and receives ₹9 lakh. The company may avail deemed EDF submission if it provides the required information to the AD Bank for crediting the remittance.
Indian LLP Receives ₹15 Lakh
An LLP receives ₹15 lakh for services supplied to an overseas customer. The deemed-submission facility under proviso (b) is unavailable because the inward remittance exceeds ₹10 lakh; otherwise applicable EDF requirements must be followed.
Indian Company Imports Services Worth ₹8 Lakh
An Indian company purchases professional services from an overseas consultant for ₹8 lakh. The specified IDPMS reporting requirement under Regulation 18(1)(d) does not apply because the invoice or contract value does not exceed ₹10 lakh.
Indian Company Imports Services Worth ₹18 Lakh
An Indian company imports technical services under a contract valued at ₹18 lakh. The AD Bank must enter the relevant service-import details in IDPMS within five working days of receiving the details, subject to the applicable regulatory framework.
Matters Requiring Clarification
Information Required by AD Banks
The amendment refers to information required by the AD Bank in relation to receipt of payment but does not itself prescribe a separate uniform list specifically for the new deemed-submission facility. Exporters should follow the documentation and information requirements communicated by their banks.
Multiple Remittances Against One Invoice
For non-individual exporters, the ₹10 lakh threshold refers to inward remittance value. A practical question arises where a service-export invoice exceeding ₹10 lakh is realised through multiple instalments, each not exceeding ₹10 lakh. For example, an invoice of ₹18 lakh may be settled through two receipts of ₹9 lakh. The amendment does not expressly resolve the treatment of such arrangements. Exporters should obtain clarification from their AD Bank rather than assume that splitting receipts automatically eliminates separate EDF filing requirements.
Compliance Implications
Service exporters should identify whether they are resident individuals or other persons, monitor relevant inward remittance values and retain invoices, contracts, remittance particulars and information furnished to AD Banks. Service importers should distinguish IDPMS reporting relief from their continuing FEMA payment and documentation obligations. AD Banks should implement the revised classification and reporting controls while maintaining adequate transaction records.
Conclusion
The RBI’s Second Amendment Regulations, 2026, simplify compliance for cross-border service transactions from 1 October 2026. Resident individual service exporters benefit from deemed EDF submission without a monetary ceiling, while other exporters receive this treatment where the inward remittance does not exceed ₹10 lakh. On the import side, specified IDPMS reporting applies to non-individual importers where invoice or contract value exceeds ₹10 lakh. Businesses should distinguish these different threshold tests, comply with AD Bank information requirements and seek clarification in complex or instalment-based transactions.
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Disclaimer: This article is intended solely for general information and educational purposes and should not be treated as legal, tax, regulatory, accounting or professional advice, or as a substitute for examining the applicable statutory provisions and directions. The discussion is based on the Foreign Exchange Management (Export and Import of Goods and Services) (Second Amendment) Regulations, 2026, as described above, and the regulatory framework referred to in the article. Readers should consult the original Reserve Bank of India notification, the principal regulations as amended, relevant Master Directions, circulars and any subsequent clarifications before taking action. The availability of deemed EDF submission does not necessarily exempt a person from other requirements relating to export proceeds, transaction documentation, reporting, foreign exchange realisation or repatriation. Similarly, a relaxation in the specified IDPMS reporting requirement should not be interpreted as a blanket exemption from rules governing imports of services, outward remittances, taxation or related compliance. The practical examples are illustrative and assume that the stated facts satisfy all other applicable conditions. The treatment of instalment payments, aggregation of remittances, exchange-rate conversion, contract valuation and documentation may depend on the exact regulatory wording, transaction facts and AD Bank procedures. Different banks may request additional supporting documents or apply verification controls in accordance with applicable directions. Regulatory provisions may be amended, clarified or interpreted differently after publication. Readers should obtain transaction-specific advice from a qualified professional and confirm requirements with their Authorised Dealer Bank before filing declarations, making or receiving payments, or relying on any reporting relaxation. Neither the author nor the publisher assumes responsibility for decisions made solely on the basis of this general discussion.
