Paypal India Withdrawals get further clarity


Paypal seems to have brought out some clarity regarding India based Bank withdrawals. According to the post made by Farhad Irani today on paypal blog, they has suspended all bank withdrawals for 3 days from March 1st to March 3rd (tomorrow.).


Now, according to the post, the paypal user will have to furnish a purpose code that helps bank furnish information that may be required by the RBI to identify the nature of the cross border transaction. Details on the different purpose codes are in the table below. 

The reason this purpose code is required by Paypal – according to Indian law, based on the value of withdrawal and the purpose code in paypal user’s declaration, the bank may require you to provide documentary proofs such as invoices / goods receipt forms as applicable to reconcile with users withdrawal.

Purpose Code Table





Who should be using it


Export of Goods

Value of export bills negotiated / purchased/discounted etc. (covered under GR/PP/SOFTEX/EC copy of shipping bills etc.)

eBay merchants, jewelers, sellers of collectibles and other such products through eBay and your own websites / catalogues globally.

Please note: Cross border shipment of goods and services for which you file GR / PP / SOFTEX / EC forms only should be processed with this code.

If you have any questions, please check with your bank to help you with the same.


Travel , Hospitality and Tours

Purchases towards travel (Includes purchases of foreign TCs, currency notes etc over the counter, by hotels, hospitals, Emporiums, Educational institutions etc. as well as amount received by TT/SWIFT transfers or debit to Non-Resident account).

Online Travel Agents, Airlines, Railways, Buses, Taxicab Services, Hotels, B&Bs and other travel / tourism related sales through PayPal




Information Technology

Computer Information Services. Hardware / Software / Data Processing consultancy/implementation

If you are an independent / freelance coder / hardware consultant or data processing service provider, or a small business providing such services for websites globally, please use these codes.

For all IT related consulting services where you know you do not need to file a SOFTEX form, please use the appropriate code. 801 for hardware consulting, 802 for software consulting and 803 for data management and processing consulting services



Content and Journalism

News Agency and Subscription services

If you are a freelance journalist / blogger / news aggregator please use this purpose code for withdrawals.

If you are a newspaper or an online news aggregator for websites overseas, please use the appropriate code from these two. 805 if you a freelance journalist, and 806 if you are a newspaper / aggregator


Licensing of creative works

Receipts for use, through licensing arrangements, of produced originals or prototypes (such as manuscripts and films)

Artists, designers, other creative service providers where the principal revenue mode is license fees, please use this code.

If you produce creative works which you license out for entities overseas, licensing revenues may be classified under this purpose code


Other services

Legal Services

If you are providing outsourced law related services


Accounting, auditing, book keeping and tax consulting services

For accounting consulting and accounting services


Business and management consultancy and public relations services

Management / brand consulting and management services can be exported with this purpose code


Advertising, trade fair, market research and public opinion polling services

Marketing/ brand consulting / logo design / event management services can be exported with this purpose code


Research & Development services

If you are an outsourced research and development services provider based in India, receipts can be inwarded through this purpose code


Architectural, engineering and other technical services

Any other technical services such as eTutoring, education and other services you render over the internet via web conferencing tools or similar channels, please use this code for your withdrawals

Here are some of the Frequently asked Questions by Paypal Users:

Q.) What if none of the above are applicable?

The purpose codes above should cover your business. If you are unclear on what purpose code you should choose, please contact PayPal customer support by logging into your PayPal account and clicking on ‘contact us’ at the bottom of the page.

Q.) I run a charity, and I am based in India. I don’t see the purpose code for donations and charities

A. PayPal can currently be used only as a gateway for payments of goods and services into India. We cannot process payments for charitable donations at this time.

Q.) My account says I am not allowed to withdraw. I see my balances are restored but I am unable to provide a withdrawal instruction

A: We may have suspended withdrawals from your account as we work to incorporate changes in the withdrawal process.  We will be requiring additional verification regarding the nature of the transactions you are performing.

Q. I used to use PayPal for Personal Inward Remittance to India. Now, my balances are stuck in PayPal

A. We are no longer able to complete these withdrawals to your bank account in India.  You do have the option to complete your withdrawals by check.  If you have any questions, we urge you to contact PayPal customer support by logging into your PayPal account and clicking on ‘contact us’ at the bottom of the page.

Finally, there seems to be some relief to the agony of Paypal users

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