Working From India for a US Company: Tax Guide 2026

Getting the offer from a US company is the exciting part. Then the questions start: contractor or employer of record, which tax regime, whether you need GST registration, and why the dollars arrived a little lighter. This guide covers the money and the paperwork, with the rules as they stood on 19 October 2026.

Two changes make 2026 different from older guides. The Income-tax Act, 2025 applies to income earned from 1 April 2026, so the familiar section numbers have moved. And the RBI's new export rules for services took effect on 1 October 2026.

This is general information, not tax or legal advice. It assumes you are resident and ordinarily resident in India. Rules depend on your facts, so check your own situation with a chartered accountant before you sign or file.

Who actually employs you: contractor, EOR or Indian entity?

A US company can pay someone in India in three common ways. Ask which one before comparing numbers, because "$60,000 a year" means something different in each column.

	Independent contractor	Employer of record (EOR)	Company's Indian entity
Who signs your contract	The US company, as a client	The EOR, which is your legal employer in India	The company's Indian subsidiary
Who directs your work	The client	The US company	The company
How you are paid	You invoice, usually in USD	Indian payroll salary, usually in INR	Indian payroll salary in INR
Income tax	You compute it and pay advance tax	Deducted from salary (TDS)	Deducted from salary (TDS)
GST and RBI paperwork	Yours, as an exporter of services	Not yours	Not yours
PF and gratuity	None from a services contract	Applies, subject to eligibility	Applies, subject to eligibility

As Remote's India guide puts it, the EOR is the employer on paper while the client manages daily work.

Which US companies hire remotely from India?

Fewer than the label suggests. In our index on 19 October 2026, only about 3% of remote roles at US-headquartered companies were open to someone living in India. US companies still supply about 62% of all remote roles open to India from foreign companies. For how to find and screen these postings, see our guide to international remote jobs from India.

Of the US roles open to India, about 87% are open to anywhere, about 7% name Asia-Pacific and about 6% name India.

The kind of company matters more than the job title:

Company type	Share of US remote roles open to India	Share of all US remote roles
Growth-stage companies	about 46%	about 22%
Public companies	about 19%	about 30%
51 to 500 employees	about 52%	about 34%
10,000+ employees	about 1%	about 13%
Describes itself as remote-first	about 17%	about 5%

By role family, software engineering accounts for about 29% of these roles, sales about 17%, marketing about 9%, customer success about 8%, and product management and AI/ML about 6% each. About 64% of the postings say full-time, about 8% say contract, freelance or temporary, and about 27% do not say. Full-time describes hours, not the employer, so ask directly. Our international remote jobs board applies the same open-to-India test.

How is a contractor taxed in India in 2026?

If you are resident and ordinarily resident, your total income includes income that accrues outside India. A US client, a USD invoice or a foreign bank account does not make the income tax-free in India.

Watch the year. Income earned from April 2025 to March 2026 is filed as AY 2026-27 under the old Income-tax Act, 1961. Income earned from 1 April 2026 falls in "tax year 2026-27" under the new Act, with the return due in 2027.

Most independent developers look at presumptive taxation. Under the old Act this was section 44ADA; under the new Act it is section 58. The rules are the same in substance:

Rule	Section 58 (new Act), formerly 44ADA
Who can use it	A resident individual, or a firm that is not an LLP
Eligible work	A specified profession; information technology has been a notified profession since 2001
Receipts limit	₹50 lakh, or ₹75 lakh if cash receipts are no more than 5% of the total
Taxable income	50% of gross receipts, or more if you actually earned more
Expenses	No further deductions against the presumptive income
Declaring less than 50%	Books of account and an audit can be required

A job title such as "AI engineer" does not by itself prove the work is a qualifying profession, so confirm eligibility with your CA.

The new regime is the default. The new Act's slabs (section 202) are 0% up to ₹4 lakh, 5% to ₹8 lakh, 10% to ₹12 lakh, 15% to ₹16 lakh, 20% to ₹20 lakh, 25% to ₹24 lakh and 30% above that, plus 4% cess. The old regime for under-60s is 0% to ₹2.5 lakh, 5% to ₹5 lakh, 20% to ₹10 lakh and 30% above, but it allows deductions such as ₹1.5 lakh under 80C and ₹50,000 under 80CCD(1B).

If you have business or professional income, choosing the old regime is not a casual yearly toggle. Under section 202 the option must be exercised by the return due date and then applies to later tax years.

What does a $60,000 contract cost in tax?

Here is a worked example. Assumptions: you are a resident developer, your work qualifies under section 58, every payment arrives by bank transfer, the rate is ₹95 to the dollar (close to the rates payment platforms were quoting in October 2026), and the tax year is 2026-27.

$60,000 becomes ₹57 lakh of receipts. That is above ₹50 lakh, so you rely on the ₹75 lakh limit, which works only because cash is under 5%. Presumptive income is 50%, or ₹28.5 lakh.

	New regime	Old regime
Presumptive income	₹28,50,000	₹28,50,000
Deductions assumed	None	₹2,00,000 (80C plus 80CCD(1B))
Taxable income	₹28,50,000	₹26,50,000
Tax before cess	₹4,35,000	₹6,07,500
Cess at 4%	₹17,400	₹24,300
Total	₹4,52,400	₹6,31,800
Share of gross receipts	about 7.9%	about 11.1%

On these assumptions the new regime saves about ₹1.8 lakh. Income stays under ₹50 lakh, so no surcharge applies.

For comparison, an EOR employee with a ₹30 lakh salary under the new regime takes the ₹75,000 standard deduction, is taxed on ₹29.25 lakh, and pays about ₹4,75,800 including cess. So the contractor billing ₹57 lakh pays roughly the same income tax as an employee on ₹30 lakh. That does not make contracting better. The contractor funds their own leave, health cover, equipment and compliance, and gets no PF or gratuity.

A smaller case: a part-time contractor billing $20,000 (₹19 lakh) has presumptive income of ₹9.5 lakh. Under the new regime the department publishes a rebate of up to ₹60,000 where total income is up to ₹12 lakh, so tax would be nil, assuming that rebate applies to your year.

When do you pay the tax?

Advance tax applies once your liability for the year is ₹10,000 or more. Salaried and regular taxpayers pay cumulative instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March.

If you use the presumptive scheme, you may pay the whole amount in one go by 15 March. For tax year 2026-27 that date is 15 March 2027. The transition FAQ confirms the dates are unchanged under the new Act, and late payment attracts interest.

Do you need GST registration to bill a US client?

Usually, once you pass the threshold. For services supplied across state lines, which includes exports, registration is required above ₹20 lakh of aggregate turnover in a financial year (₹10 lakh in special category states). Export receipts count toward that turnover. The $60,000 contractor above crosses it; the $20,000 contractor does not.

Being registered does not mean charging 18%. A supply is an export of services, and zero-rated, when all five conditions hold: you are in India, the client is outside India, the place of supply is outside India, you are paid in convertible foreign exchange (or INR where the RBI permits), and you and the client are not merely two establishments of the same entity.

To export without paying IGST, a registered exporter files a Letter of Undertaking (Form GST RFD-11) on the GST portal before exporting. It is filed for a financial year, so renew it each April.

One more 2026 change: the Finance Act, 2026 omitted the old intermediary place-of-supply clause, so older warnings on that point may be out of date.

How do you get paid, and what do platforms charge?

Compare the final rupees you receive for the same invoice, not the advertised fee. These are each provider's published charges as of October 2026; your own quote may differ.

Route	Published charges	Limits and notes
Wise Business	Variable conversion fee (its own page example showed 0.25%), plus USD 2 equivalent per transfer to your INR account for the automatic e-FIRC	Minimum USD 5, maximum ₹25 lakh per transaction; e-FIRC emailed 2 to 3 days after transfer
Payoneer	Free via a local-currency receiving account; 1% (minimum USD 1) in a non-local currency; 1% from US ACH debit; up to 3.99% plus USD 0.49 by card	USD 29.95 annual fee if you receive under USD 6,000 in any 12 months; FIRA documents free within 24 to 72 hours
Skydo	USD 19 up to USD 2,000; USD 29 from USD 2,001 to 10,000; 0.3% above USD 10,000; 18% GST on the fee	States live FX with no markup
Bank wire (HDFC example)	Nil inward remittance charge; ₹200 per FIRC plus GST	GST applies on the currency converted; sending and correspondent bank charges are extra

On a $5,000 monthly invoice, Skydo's published fee is $29 plus 18% GST, or $34.22. Wise would be $2 plus its conversion fee, which varies by amount and currency. Ask each for a live quote on the same amount.

Keep the remittance document (e-FIRC, FIRA or FIRC) for every payment; it supports your export claim but is not your whole compliance file.

What changed in the RBI's export rules on 1 October 2026?

The RBI's Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 replaced the old master directions from 1 October 2026. Three points matter to service exporters:

• Declaration. An exporter of services files an Export Declaration Form within 30 days from the end of the month of the invoice. One form can cover a whole month. "Software" is defined broadly, including programmes and databases.
• Realisation. Payment must be realised and brought into India within nine months of the invoice date. Your bank can extend this.
• Small invoices. For invoices up to ₹10 lakh, the bank may close the export entry on your declaration that payment arrived.

How banks and payment platforms will handle these forms for individual freelancers is still settling, and older platform guides predate the rules. Ask your bank, or your platform's partner bank, what they file for you.

What should an EOR or Indian-entity offer show?

Through an EOR or an Indian entity, the employer withholds tax and runs PF. Your job is to read the offer.

• PF. Contributions are 12% from you and 12% from the employer. The statutory wage ceiling rose from ₹15,000 to ₹25,000 a month from 17 September 2026, so where contributions are capped, each side now pays ₹3,000 a month, not ₹1,800. Some provider country guides still show old figures.
• Gratuity. 15 days' wages for each completed year, capped at ₹20 lakh. Since the labour codes took effect on 21 November 2025, fixed-term employees qualify after one year.
• The EOR's fee is not your pay. Deel and Remote publish EOR pricing from USD 599 per employee per month, paid by the company. Rippling asks for a demo instead of publishing a price.
• Notice. It varies by state and contract. Remote's guide gives 30 days in Delhi after three months' service, and contracts often set longer periods.

Ask for a breakdown that separates gross salary, employer PF, your deductions and any gratuity accrual.

What should be in your contract?

Whatever the model, read the intellectual property clause. Under India's Copyright Act, an assignment must be in writing and signed. If it does not state duration, the default is five years; if it does not state territory, the default is India. Both sides benefit from spelling these out.

Also check who bears transfer fees, the payment currency, acceptance of deliverables, notice and governing law. A US governing-law clause does not remove your Indian tax duties. If you are still choosing roles, our remote software engineer jobs board lists engineering roles open to India.

How we got these numbers (19 October 2026). We took live, non-duplicate remote roles in the landed index, read from each company's own careers page, at companies headquartered in the US, excluding roles located in India. A role counts as open to India when its posting is open to anywhere, to Asia-Pacific, Asia or South Asia, or to a list of countries that includes India, and it does not exclude India. Company stage, size, AI focus and remote policy come from our company profiles; employment type is what the posting states. Tax figures are our own arithmetic on the published slabs, using the assumptions stated in each example and ₹95 per US dollar. Platform fees are as published on each provider's site and can change.

Sources

• landed job index, live remote roles on 19 October 2026, with the open-to-India test described above.
• Income Tax Department, FAQs on Interplay and Transition to the Income-tax Act, 2025 (commencement, return years, advance tax dates).
• Income Tax Department, Income-tax Act, 2025, section 58 (presumptive taxation), last reviewed 8 October 2026.
• Income Tax Department, Income-tax Act, 2025, section 202 (new regime slabs and option), last reviewed 8 October 2026.
• Income Tax Department, Income-tax Act, 2025 as amended by the Finance Act, 2026 (scope of total income for residents).
• Income Tax Department, Salaried Individuals for AY 2026-27 (old regime slabs, rebate, cess, surcharge, deductions, Form 10-IEA).
• Income Tax Department, Various Deductions under the Income-tax Act (standard deduction, section 87A rebate).
• Income Tax Department, Small Businessmen: Benefits Allowable (section 44ADA limits, advance tax threshold and presumptive instalment).
• CBDT Notification 385(E), 4 May 2001 (information technology notified as a profession).
• CBIC, IGST Act, 2017, section 2(6) (export of services).
• CBIC, Notification 10/2017, Integrated Tax, 13 October 2017 (registration threshold for inter-state services).
• GST Portal, Furnishing of Letter of Undertaking for Export of Goods or Services (Form GST RFD-11).
• CBIC, Circular 159/15/2021-GST, 20 September 2021 (intermediary services).
• Finance Act, 2026, Gazette of India, 30 March 2026, section 157.
• Reserve Bank of India, Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, amended up to 22 September 2026, effective 1 October 2026.
• Reserve Bank of India, A.P. (DIR Series) Circular No. 20, 16 January 2026.
• PIB, EPF wage ceiling raised to ₹25,000, 18 September 2026 and 23 September 2026.
• EPFO, FAQs (contribution rates).
• Ministry of Labour and Employment, FAQs on Labour Codes, and Additional FAQs as on 16 March 2026 (gratuity, fixed-term employment).
• Copyright Act, 1957, India Code (assignment requirements).
• Wise, Receiving payments for Indian businesses and Receive money in India pages.
• Payoneer, Pricing (last updated 1 January 2026) and Decoding FIRC (11 June 2023).
• Skydo, published pricing and P0802 purpose code guide (4 August 2026).
• HDFC Bank, Remittance fees and charges.
• Deel, Pricing; Remote, Pricing and India Country Explorer; Rippling, Employer of Record.