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

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

Foreign income must be correctly reported across multiple schedules in the Indian ITR. Here's the map:

• Schedule FSI (Foreign Source Income): All income earned abroad. Enter: country of source, head of income (business income for freelance), gross amount, taxes paid abroad (if any), DTAA relief claimed.
• Schedule TR (Tax Relief): Credit for taxes paid in foreign countries under DTAA. Required if you paid tax abroad on income that's also taxable in India.
• Schedule FA (Foreign Assets): Declare all foreign bank accounts (Wise, Payoneer balances above threshold), foreign investments, and foreign immovable property. Applies to Indian residents with foreign assets — required even if income is nil.
• Which ITR form: ITR-3 (business income + foreign income). Not ITR-4 (presumptive scheme not available for foreign income in all cases — check current rules).
• Advance tax: Foreign income is subject to advance tax in India. Compute estimated annual income in Q1 and pay advance tax in four instalments (June 15, September 15, December 15, March 15).