How to Declare Foreign Income in India: ITR Filing Guide for Freelancers (2026)

• ITR-1 (SAHAJ): for salaried individuals with income up to ₹50 lakh. NOT applicable if you have foreign income or business income.
• ITR-3: for individuals with income from business/profession. Most freelancers with direct foreign clients should use this.
• ITR-4 (SUGAM): for individuals opting for presumptive taxation (Section 44ADA). Eligible only if gross receipts under ₹50 lakh and you're a specified professional.

Convert foreign income to INR using the SBI TT buying rate for the date of receipt. This is the RBI-mandated rate for tax purposes. Do not use Wise's rate, Google's rate, or the rate at which you actually received INR.

• Find SBI TT rates at sbi.co.in → Forex Rates → Historical Rates
• Use the 'TT Buying Rate' (Telegraphic Transfer Buying) for the date the foreign currency was received
• If you receive $5,000 on March 15, look up SBI TT USD buying rate for March 15 and multiply
• Keep a spreadsheet of all foreign receipts with dates and SBI TT rates for the year

ITR-2 and ITR-3 include Schedule FSI (Foreign Source Income). This is where you declare all foreign income:

• Country code: two-letter ISO code (US = US, GB = UK, AE = UAE)
• Nature of income: Business Income (code BS) for freelance services
• Amount (in INR): converted at SBI TT buying rate on receipt date
• Tax paid outside India: if any (most freelancers pay 0 foreign tax)
• DTAA article: leave blank if no treaty benefit claimed