Now PayPal India Requires Purpose Code, PAN, Bank Account

By Posted 2011 Updated   India

PayPal India now makes it mandatory for all Paypal users in India to add Purpose Code, PAN, Bank Account to withdraw money from Paypal. This is in continuation of its restrictions to comply with Indian Reserve Bank of India (RBI) guidelines.

Paypal add purpose code

Paypal India Restrictions

In an email sent out to all Paypal India users, they informed all PayPal users in India will need to add following details to continue export-related payments and withdraw money:  Purpose code, PAN Number and Bank account number in India.

Earlier only PAN and mobile number were mandatory and users were able to withdraw via cheque (limit of $2500 per month) without a purpose code. Now Paypal requires that you need to add a PAN number, compulsorily specify a purpose code identifying type of payment and specify a bank account number too to verify your bank transactions.

paypal india purpose code

Earlier RBI had stopped Paypal payments to and from India, which was later restored after Paypal complied with law guidelines. Then Paypal restricted Indian users that that they may not use Paypal funds to buy goods or services and balance funds must be transferred to bank account in India within 7 days. In addition, Export-related payments for goods and services to PayPal may not exceed US$500 per transaction.

That meant a lot of small businesses and bloggers now had to disclose income sources, transfer money back to India and pay taxes on the newly declared income. This was a step by RBI to get more accountability of money transfer using Paypal in India. Now the requirements are more tight as people find Paypal alternatives.

How have these rules affected your Paypal experience in India?


7 comments on “Now PayPal India Requires Purpose Code, PAN, Bank Account

  1. Julian says:

    wow, is that because of the lack of cyber security?

  2. Vivek Shah says:

    This is pathetic, RBI is helping Paypal increasing its profits.

    Paypal charges 2.5% fees from currency conversions, with these deadlock indian bloggers are losing atleast 5% of their income and 10%+ inflation is already there.

    I tried to pay hosting fees directly with my CC but SBI currency conversion is worst than paypal…

    RBI should allow resident indian to keep US$ in bank account and issued a credit card ( in us$ ) so that indian bloggers can eliminate paypal from sending payments for hosting and domains and other purposes.

  3. Vivek R says:

    Hi,

    I have invested in Forex trading (Currency & gold)in AVAFX.com & deposited by paypal, Now i want to withdraw my amount through paypal.
    I am not understanding which code (purpose code) should i use for withdrawing money from paypal to my bank account. And how to declare tax for this income.
    Anybody can give good suggestion please

  4. Roopa says:

    what’s a purpose code? jus wondering what the next type of code our govt is going to require of paypal? Isnt a bank account and pan card sufficient proof? I used my mastercard debit card to confirm..and it only seems that charges are debited from my bank a/c but no code in the statement! Whew! The entire process is quiet tiring and trying!

  5. Manoj kumar says:

    sir,
    i am known what is purpose code and how it find and what is role of paypal account.

  6. Sohail says:

    What is currency code of india for paypal.?

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