As promised by Farhad Irani on 26th February, that he will be back with some information regarding the bank withdrawals, he has written a blog post on Official PayPal Blog about the nature and withdrawals and resuming of services.
PayPal withdrawal has been the easiest way for freelancers in India to get money safely to their local bank accounts and within stipulated time frame. Well coming to the information.
PayPal needs to put in place certain changes to comply with Indian regulations. This means that Indian PayPal users (Business, Premier and Personal Account Holders) are no longer able to receive personal payments. Your customers now have three options to pay you by
- Using the Pay for Purchases (Goods or Services) tab
- Completing PayPal checkout at your website
- Responding to PayPal “Request Money” instructions (invoices)
When you instruct PayPal to withdraw your PayPal balance to your bank account in India, you will be required to provide a purpose code for the transaction.
What are the Purpose Codes I need to use?
Please use whichever purpose code below correctly identifies your business.
| Code | Category | Description | Who should be using it |
| P0101 / P0104 | 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. Use P101 if Deutsche Bank is your banker and P0104 if you bank with any other bank If you have any questions, please check with your bank to help you with the same. |
| P0301 | 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 |
| P0801 P0802 P0803 | 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 |
| P0805 P0806 | 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 |
| P0902 | 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 |
| P1004 | Other services | Legal Services | If you are providing outsourced law related services |
| P1005 | Accounting, auditing, book keeping and tax consulting services | For accounting consulting and accounting services | |
| P1006 | Business and management consultancy and public relations services | Management / brand consulting and management services can be exported with this purpose code | |
| P1007 | 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 | |
| P1008 | Research & Development services | If you are an outsourced research and development services provider based in India, receipts can be inwarded through this purpose code | |
| P1009 | 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 |
Well Let’s see what PayPal is upto and what will we have to do to get our money safely from PayPal accounts to Indian Bank Accounts. In my opinion Bloggers will have to choose P0805 , P0806 in the Purpose code as we all write on different blogs which are not directly hosted in India, it might be possible that we will have to show the Bank about the details of website on which we are operating. And yes PayPal withdrawal resumes on 3rd March but with a Purpose code.