{"id":11752,"date":"2010-03-02T21:57:33","date_gmt":"2010-03-02T16:27:33","guid":{"rendered":"https:\/\/www.quickonlinetips.com\/archives\/?p=11752"},"modified":"2026-10-11T11:41:36","modified_gmt":"2026-10-11T06:11:36","slug":"paypal-india-purpose-code","status":"publish","type":"post","link":"https:\/\/www.quickonlinetips.com\/archives\/2010\/03\/paypal-india-purpose-code\/","title":{"rendered":"PayPal India Purpose Code: Which Code to Use in 2026"},"content":{"rendered":"<p>Do you need a PayPal India purpose code to receive money from abroad? Yes. When we first wrote about this in March 2010, PayPal had just told Indian users to fill in a new &#8220;Purpose Code&#8221; field to withdraw money, after a long <a href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/02\/paypal-stops-india-payments\/\">PayPal India payments fiasco<\/a>. In 2026 the purpose code is still part of every Indian PayPal business account. Here is what it is, which code to choose, and how PayPal works in India today.<\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-large wp-image-63811\" src=\"https:\/\/www.quickonlinetips.com\/archives\/wp-content\/uploads\/paypal-india-purpose-code-2026-1024x538.webp\" alt=\"PayPal India purpose code\" width=\"1024\" height=\"538\" srcset=\"https:\/\/www.quickonlinetips.com\/archives\/wp-content\/uploads\/paypal-india-purpose-code-2026-1024x538.webp 1024w, https:\/\/www.quickonlinetips.com\/archives\/wp-content\/uploads\/paypal-india-purpose-code-2026-300x158.webp 300w, https:\/\/www.quickonlinetips.com\/archives\/wp-content\/uploads\/paypal-india-purpose-code-2026-150x79.webp 150w, https:\/\/www.quickonlinetips.com\/archives\/wp-content\/uploads\/paypal-india-purpose-code-2026-768x403.webp 768w, https:\/\/www.quickonlinetips.com\/archives\/wp-content\/uploads\/paypal-india-purpose-code-2026.webp 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/p>\n<p><strong>Quick answer:<\/strong> A PayPal India purpose code is an RBI code that tells banks why foreign money is coming into India, for example payment for software, consulting or advertising services. You select it in your PayPal account settings, and it must match what you are actually paid for. PayPal India now only supports receiving international (export) payments, which are converted to INR and sent to your Indian bank account.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_88 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6ad290446e399\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #1a202c;color:#1a202c\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #1a202c;color:#1a202c\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6ad290446e399\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/03\/paypal-india-purpose-code\/#What_is_a_purpose_code\" >What is a purpose code?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/03\/paypal-india-purpose-code\/#Common_PayPal_India_purpose_codes\" >Common PayPal India purpose codes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/03\/paypal-india-purpose-code\/#How_to_add_a_purpose_code_in_PayPal_India\" >How to add a purpose code in PayPal India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/03\/paypal-india-purpose-code\/#PayPal_India_rules_in_2026\" >PayPal India rules in 2026<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/03\/paypal-india-purpose-code\/#What_changed_since_2010\" >What changed since 2010<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/03\/paypal-india-purpose-code\/#FAQ\" >FAQ<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/03\/paypal-india-purpose-code\/#Which_purpose_code_should_a_freelancer_use_on_PayPal\" >Which purpose code should a freelancer use on PayPal?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/03\/paypal-india-purpose-code\/#Can_I_change_my_PayPal_purpose_code_later\" >Can I change my PayPal purpose code later?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/03\/paypal-india-purpose-code\/#Can_I_receive_money_from_Indian_clients_on_PayPal\" >Can I receive money from Indian clients on PayPal?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/03\/paypal-india-purpose-code\/#Do_I_need_an_IEC_code_for_PayPal\" >Do I need an IEC code for PayPal?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_is_a_purpose_code\"><\/span>What is a purpose code?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>India&#8217;s foreign exchange rules require every inward remittance to carry a purpose code from the Reserve Bank of India&#8217;s list. The code identifies the nature of the cross-border transaction, such as export of goods, software services or advertising. It is not the same as the Importer Exporter Code (IEC) that many bloggers worried about back in 2010.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Common_PayPal_India_purpose_codes\"><\/span>Common PayPal India purpose codes<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<table>\n<thead>\n<tr>\n<th>Code<\/th>\n<th>Description<\/th>\n<th>Typical users<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>P0102<\/td>\n<td>Realisation of export of goods<\/td>\n<td>Online sellers shipping products abroad<\/td>\n<\/tr>\n<tr>\n<td>P0802<\/td>\n<td>Software consultancy and implementation<\/td>\n<td>Developers, IT freelancers<\/td>\n<\/tr>\n<tr>\n<td>P0807<\/td>\n<td>Off-site software exports<\/td>\n<td>Software products and SaaS<\/td>\n<\/tr>\n<tr>\n<td>P0805<\/td>\n<td>News agency services<\/td>\n<td>Writers and content services (the code we suggested for bloggers in 2010)<\/td>\n<\/tr>\n<tr>\n<td>P1006<\/td>\n<td>Business and management consultancy and public relations<\/td>\n<td>Consultants, marketers<\/td>\n<\/tr>\n<tr>\n<td>P1007<\/td>\n<td>Advertising and trade fair services<\/td>\n<td>Advertising, digital marketing<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Choose the code that best describes your income. If you are unsure, ask your chartered accountant, because the purpose code affects how your income is reported.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_to_add_a_purpose_code_in_PayPal_India\"><\/span>How to add a purpose code in PayPal India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ol>\n<li>Log in to your PayPal business account.<\/li>\n<li>Open <strong>Settings<\/strong> (or Account Settings) and find the <strong>Purpose code<\/strong> section under your business information.<\/li>\n<li>Select the code that matches your products or services and save.<\/li>\n<li>Make sure your PAN, name and Indian bank account details match, because PayPal checks them before withdrawals.<\/li>\n<\/ol>\n<p>For PayPal&#8217;s current steps, see <a href=\"https:\/\/www.paypal.com\/in\/selfhelp\/article\/faq1750\" target=\"_blank\" rel=\"noopener\">PayPal India help: how to receive payments<\/a>.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"PayPal_India_rules_in_2026\"><\/span>PayPal India rules in 2026<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><strong>No domestic payments:<\/strong> since April 2021, PayPal India does not support payments between Indian users. It is only for receiving international payments.<\/li>\n<li><strong>Automatic INR withdrawal:<\/strong> you cannot hold a foreign currency balance; money is converted to rupees and transferred to your linked bank account.<\/li>\n<li><strong>Proof of receipt:<\/strong> PayPal provides monthly statements (FIRA) you can use as proof of foreign inward remittance for tax and export records.<\/li>\n<li><strong>Fees:<\/strong> PayPal charges a transaction fee plus a currency conversion margin. Check PayPal&#8217;s fee page before quoting prices to clients.<\/li>\n<li><strong>Personal payments:<\/strong> as in 2010, Indian accounts cannot receive personal &#8220;friends and family&#8221; payments; clients must pay for goods or services or pay an invoice.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"What_changed_since_2010\"><\/span>What changed since 2010<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In 2010, PayPal first allowed withdrawals only for <a href=\"https:\/\/www.quickonlinetips.com\/archives\/2010\/02\/paypal-india-bank-withdrawals-for-export-goods-services\/\">export of goods and services<\/a>, then added the purpose code field. Bloggers who earned advertising income worried about whether that counted as exporting a service, and about <a href=\"https:\/\/www.quickonlinetips.com\/archives\/2007\/04\/pay-service-tax-on-google-adsense-earnings-in-india\/\">service tax on AdSense earnings<\/a>. Later, PayPal made PAN, a purpose code and an Indian bank account mandatory to keep accounts active. Today these are standard steps when you open a PayPal business account in India.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"FAQ\"><\/span>FAQ<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Which_purpose_code_should_a_freelancer_use_on_PayPal\"><\/span>Which purpose code should a freelancer use on PayPal?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>It depends on your work: P0802 is common for software and IT services, P1006 for consulting and P1007 for advertising and marketing. Pick the code that matches your invoices.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Can_I_change_my_PayPal_purpose_code_later\"><\/span>Can I change my PayPal purpose code later?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Yes, you can update it in your account settings if your business changes. Use the correct code for each type of income.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Can_I_receive_money_from_Indian_clients_on_PayPal\"><\/span>Can I receive money from Indian clients on PayPal?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>No. PayPal India stopped domestic payments in April 2021. Use UPI or bank transfer for Indian clients.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Do_I_need_an_IEC_code_for_PayPal\"><\/span>Do I need an IEC code for PayPal?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Not for most service providers. Sellers exporting physical goods may need one under trade rules; check with a professional.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Do you need a PayPal India purpose code to receive money from abroad? Yes. When we first wrote about this&#8230;<\/p>\n","protected":false},"author":4,"featured_media":63811,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"default","_kad_post_title":"default","_kad_post_layout":"default","_kad_post_sidebar_id":"","_kad_post_content_style":"default","_kad_post_vertical_padding":"default","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[1],"tags":[24],"class_list":["post-11752","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tips","tag-india"],"_links":{"self":[{"href":"https:\/\/www.quickonlinetips.com\/archives\/wp-json\/wp\/v2\/posts\/11752","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.quickonlinetips.com\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.quickonlinetips.com\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.quickonlinetips.com\/archives\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.quickonlinetips.com\/archives\/wp-json\/wp\/v2\/comments?post=11752"}],"version-history":[{"count":1,"href":"https:\/\/www.quickonlinetips.com\/archives\/wp-json\/wp\/v2\/posts\/11752\/revisions"}],"predecessor-version":[{"id":63814,"href":"https:\/\/www.quickonlinetips.com\/archives\/wp-json\/wp\/v2\/posts\/11752\/revisions\/63814"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.quickonlinetips.com\/archives\/wp-json\/wp\/v2\/media\/63811"}],"wp:attachment":[{"href":"https:\/\/www.quickonlinetips.com\/archives\/wp-json\/wp\/v2\/media?parent=11752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.quickonlinetips.com\/archives\/wp-json\/wp\/v2\/categories?post=11752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.quickonlinetips.com\/archives\/wp-json\/wp\/v2\/tags?post=11752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}