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Which PayPal Purpose code suits you the most for withdrawal of funds to your bank account in India!!



Many Indian PayPal users still find difficult to understand the Purpose code and which purpose code suits them to withdraw funds from PayPal account.

PayPal introduced the concept of “Purpose Code” in March 1, 2010 and the changes were implemented to comply with Indian regulations for settlements for exports of goods and services. This information was required under the laws of India in order to identify the nature of cross-border merchant transactions.
Link of PayPal official blog:

The purpose code helps your bank furnish information that may be required by the Reserve Bank of India to identify the nature of the cross border transaction. In accordance with Indian regulations, selecting a purpose for your transactions (i.e. purpose code) is essential. By choosing a purpose code, you help the regulators in identifying the exact nature of your cross-border transaction. This is required to withdraw (or transfer) funds from your PayPal account to your local bank account.

And now with the recent update from PayPal check this: PayPal update for India! we have to provide this information under paypal it’s a onetime selection and the purpose code you add is stored and used as a default purpose code for all your transactions, until you select a different one.

What else you should also know related to Purpose code:

You are required to select a purpose for funds withdrawal. Based on Indian laws and regulations, all proceeds from exports must be declared to your local (Indian) bank. You may also be requested to furnish supporting documentation (sales invoice, shipping documents, etc.) related to exports by your bank. Currently, PayPal only facilitates transactions involving sale or export of goods and services.
Please note:
  • The selected purpose will appear as a code on your bank account statement along with the description.
  • If you have any additional questions related to the Purpose Code on your account statement, please check with your bank for help on this.
The table below provides the purpose group, selected purpose with its corresponding description and a column on who should use this - to help you make an informed choice.
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4 comments:

  1. If I am using my PayPal account to deposit funds for online trading and again use the PayPal to push back the funds from the trading profits, which is the purpose code I should use or is it good to at all use PayPal for such activities?

    ReplyDelete
    Replies
    1. For Indian Paypal users, we can't add funds in our paypal account, nor we are allowed to use our paypal funds for any transaction, If we receive funds in our paypal account, then those funds need to get transfered to our bank account asap. we can make use of Paypal by using our debit and credit cards to make transactions.

      I have not heard any update as such as mentioned above that we can use paypal funds for online trading transaction.

      If you have any update, please share with us.
      This is update related to paypal
      http://articles.economictimes.indiatimes.com/2012-11-23/news/35317424_1_paypal-plans-online-payment-firm-indian-regulators

      Delete
    2. Why and where to use Purpose code

      The purpose code helps your bank furnish information that may be required by the Reserve Bank of India to identify the nature of the cross border transaction. In accordance with Indian regulations, selecting a purpose for your transactions (i.e. purpose code) is essential. By choosing a purpose code, you help the regulators in identifying the exact nature of your cross-border transaction. This is required to withdraw (or transfer) funds from your PayPal account to your local bank account.

      Delete
    3. In simple words when you get funds in your paypal account from other country and when you tranfer funds in your bank account, you need to give the details- purpose code as what is your source of income.

      Delete

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