A Complete Guide for Remote Workers, Freelancers, and Returnees

Are you wondering if it's possible to work remotely from India for a US company after moving back from the US on an H-1B visa? You're not alone. With the rise of global remote work and the flexibility offered by US employers, many professionals are exploring how to live in India and work US hours for a US brand.

This blog is your complete guide to making this setup work—legally and tax-efficiently.

Is It Legal to Work from India for a US Company?

Yes, many former H-1B professionals are now living in India and working remotely for US companies. You can either:

• Work as a freelance contractor for a US client, or
• Continue as a remote employee (either via an Indian payroll or global PEO)

Most professionals choose the freelancer or independent contractor model, as it is more tax-efficient and easier to set up.

FEMA Rules When Working Remotely for a Foreign Company

If you're providing export services from India, FEMA (Foreign Exchange Management Act) requires that:

• All foreign earnings must be repatriated to India within 180 days or 9 months, depending on the agreement terms.
• You must maintain proof of inward foreign remittance like FIRA (Foreign Inward Remittance Advice).

Pro tip: Use services like Skydo or Wise to receive USD payments in India and generate FIRAs easily.

Contractor vs. Employee – Which Is Better from India?

Freelancer/Contractor (Best for Tax Savings)
If your income from the US is below ₹75 lakhs annually, you can opt for presumptive taxation under Section 44ADA:

• No books of account needed
• 50% of gross receipts treated as profit
• Tax only on that 50% (saving you a ton on compliance and tax)

Example: If you earn ₹60 lakhs, only ₹30 lakhs is taxable under 44ADA.

Do You Need to Pay GST While Working from India for a US Company?

Yes, if your freelance income exceeds ₹20 lakhs per year, GST registration is mandatory. However, if your services qualify as export of services, you can apply for:

• Zero-rated supply under LUT (Letter of Undertaking)
• No GST is charged to your US client
• You still need to file GST returns

Will You Be Taxed in the US While Living in India?

No, since you are not a tax resident in the US and performing all services from India.

• Ask your US client to treat you as a foreign vendor and submit Form W-8BEN to avoid 30% tax withholding.

If taxes are still withheld, you have two options:

• File Form 1040-NR to claim a refund from the IRS
• Claim a Foreign Tax Credit (FTC) in your Indian tax return

Mandatory Disclosures in Indian Income Tax Return

When you're earning in USD or holding a US bank account (like Wise or Payoneer), you must disclose:

Failure to report can result in a flat penalty of ₹10 lakhs under the Black Money Act—even for unintentional omissions.

Best Business Structure: Sole Proprietorship

For remote freelancers working with US companies, a sole proprietorship is the easiest and most tax-friendly structure.

• No registration required
• Eligible for Section 44ADA
• No need for LLP or Pvt Ltd unless you're handling large teams or need liability protection

Can You Work US Hours from India?

Absolutely. There are no legal restrictions on the time zone you work in, as long as:

• Services are exported (i.e., your client is outside India)
• Payments are received in foreign currency (USD)
• Repatriation timelines under FEMA are met

FAQs

Q1. Can I work for a US company from India remotely?
Yes, legally allowed under Indian law with proper tax compliance.

Q2. Is it legal to freelance for US clients from India?
100%, provided you report foreign income and follow FEMA & GST rules.

Q3. Do I need to pay tax in the US?
No, unless you are still a tax resident there. Submit W8BEN to avoid US withholding tax.

Q4. Can I use Section 44ADA if I work for a US company?
Yes, if you're working as an independent professional and turnover is under ₹75L.

Q5. Do I need GST registration to freelance from India for US clients?
Only if your revenue exceeds ₹20L/year. You can claim export status for zero GST.

Final Thoughts: Work for US Companies from India, the Smart Way

The idea of working remotely from India for a US company after H1B is not just doable—it's the future. With presumptive tax benefits under Section 44ADA, zero GST on exports, and W8BEN exemption in the US, this setup offers financial and lifestyle flexibility like never before.

Need Help with NRI Tax Planning or FEMA Compliance?
At Dinesh Aarjav & Associates, we help NRI returning to india, freelancers, and digital nomads manage:

• Remote work setup for US clients
• Section 44ADA filing & optimization
• W8BEN form support
• FEMA & GST compliance
• International tax & DTAA advisory

Key Takeaways