Tuesday , 20 February 2018
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PayPal Deploys Restrictions for Indian Users

PayPal is almost closed in India as it deploys the restrictions sent by RBI from 1st March 2011. When i opened the PayPal account today, i saw “Notification for PayPal users in India”.

There are two major restrictions for Indian users from March 01, they are –

  • Any balance in and all future payments into your PayPal account may not be used to buy goods or services and must be transferred to your bank account in India within 7 days from the receipt of confirmation from the buyer in respect of the goods or services; and
  • Export-related payments for goods and services into your PayPal account may not exceed US$500 per transaction.

So users, mostly webmasters in India are finding the new alternative ways to send money online. You can send money from PayPal also, but not from the balance, you should link the credit card to PayPal account. But in India many webmasters don’t have credit card and their business have been restricted till they find a new way to send and receive the money.

Why did PayPal or RBI has deployed these restrictions?

The answer is Income Tax. Yes, there are many people in India who are earning more than $1000 per month and they are using that money to buy products or services online only and the RBI can’t track those money. If the webmaster transfers the PayPal money to his bank account then uses the same money via credit card then they can keep an eye on his transactions, so they have deployed these restrictions.

About Vijayraj Reddy

Vijayraj Reddy is founder and editor-in-chief of popular blog Methods2earn.com where he teaches people how to make money online.


  1. RBI has taken a right decision in it’s own way….But they could have also done some measure like declaring the money in paypal account to conduct the business ina more transparent way. Like in US or UK people are still able to use Paypal with out hampering the national tax of the country. So in India whay RBI can’t take such a measure?

    Moreover, transfering any money we receive in paypal within 7 days, indicates that we will get the money at Paypal’s conversion rate and current forex price. So it’s a loss for people who earns their living online.
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  2. Hey inspite of the restriction announced , its not been implemented so far. Did you try sending the money via paypal? If not try it once.

    And did you try receiving more than $500, if not try that too.

    Everything is normal.
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  3. Interesting! Tax evasion occurs everywhere, so I suppose there’s merit in the decision.
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  4. PayPal says Indians can no longer use the money in paypal for making other purchase of goods or services but it’s not so. Yesterday I had to buy a hosting and I was able to do that with my paypal money. It’s paypal fooling rbi or they have not yet set the rules as said? anyway it’s good news for paypal earners. if u want to make any purchases using paypal money do it soon before the rules go in action.
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  5. OK that, now that’s an old story. Can say any good alternative ways to send money online.

  6. Paypal applying this rules is directly going to affect Indian online market. Many websites have paypal as main source of payment from abroad.
    We bloggers are also going to get hit because our affiliate earning comes in paypal in easiest way.
    But I think paypal will soon offer the same service soon.
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  7. Paypal still doing transaction above 500$ … the limit is only for those who receive payment for export related goods and services. If you get mass payment then there is no restriction for you.
    Also for the money, it should be transacted within 7days.

    There could be many reasons for this agreement.
    As in India many people work as a freelancers, and main tech support is from india.
    Few years back when there was recession many professional Americans got jobless. And the American company itself use give projects in India (coz its very cheap here). So people were not getting job in America. So they implemented a maximum tax of 15% for Indian users.
    Indians are advancing at a high rate. So the money received by people in PayPal was used to buy products online. So the further tax was saved without notification of RBI.
    As paypal being a US company therefore this may be the reason, as Indian will get tensed that there business will be shattered and few will look for alternative jobs, so there will be vacancy for Americans then.
    If RBI was the case then other sites like moneybookers haven’t got any of such terms and conditions. Why paypal??
    I guess you ppl understands it.

  8. Well said Akash !Dont think we shoud blame the rbi completely for paypal’s current situation. I too got the letter from paypal notifying me of the changes.I have tried out different payment gatgeways.Alertpay seems to be a good substitute.Check it out at http://bit.ly/fQAoRg

  9. kbharath @ Techntricksonline

    paypal is creating a real big nonsense now for all the Indian users.

  10. What you mean is that most PAYPAL users in India haven’t verified their account? Then how they are going to cash out their earnings if they were sent to their paypal accounts?

    As of my case, I used paypal for more than a year before I link my paypal to my credit card (verification method) because I don’t money at that time.

    But when I started to earn online, I used lend some money from my friends in order for me to apply for a credit card and link it to my paypal account. After that, I cashout the money and paid the money I owed from my friend.

    I am thinking that India has Union Bank there right? I use union bank also with EON card. You can use that credit card for verification.

    Thank you and have a nice day to you….

    – Felix

  11. Deal with Paypal is too hard. Be careful.
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  12. i think its a good move by RBI to keep eye on people those are not paying tax on his income
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  13. hey vijay please tell me elaborately. wts the things i have to do to earn money by internet.
    please mail the details to

    • Hi Ravi, good to see you here, there are many ways to earn money on internet and most popular is creating a free blog at blogger.com and displaying ads on it… you can also create your self hosted blog at wordpress which will cost around $100 per year, but you will have control on your blog… read my earlier posts to know more…

  14. I too don’t Ashis, PayPal has not updated its TOS for Indian users…