Tag Archives: Paypal

Bye Bye Paypal

This is an update on the issue related to the recent changes made by Paypal for withdrawals to bank accounts in India.

I had tried calling Paypal support team and talking to them about the major issue that I found with using Paypal withdrawal into our bank account in India, where it did not get deposited as a foreign income and only got deposited in Indian Rupees as local income – which is really bad for us as we will lose the tax benefits we have when we get foreign income. More this withdrawal issue from Paypal are available in this link.

After 30 minutes of wait, I was directed to a customer service manager called – Rocio who said she is based out of the US and she clarified to me two things:

1. Paypal Regulations Team which sets these policies do not accept any information from customers in any form (email or phone)

2. The withdrawals into bank accounts in India will only come in the form of Indian Rupee.

This only means using Paypal will prevent us from any of the tax benefits we are allowed to receive for bringing foreign income into India. That also means, it is time to stop using Paypal until this changes.

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Paypal withdrawals to Banks in India – Major Issue

Auro Infotech handles many clients outside India and gets tax deductions for all Foreign Income, just like any other company from India that works with clients outside India.

In order to get these deductions, Auro Infotech will have to receive payments into its banks in foreign currency only.

Paypal is one of the payment gateways we use to receive payment from our clients. With Paypal’s feature to transfer money into banks in India, we used to withdraw from Paypal to our bank accounts as US Dollar and it was considered as foreign income.

After the recent changes announced by Paypal, the option to choose in USD or INR is removed and we have withdrawn two payments so far. We realized this week that the payment is coming in only as Indian Rupees, which will directly make us ineligible to get any tax deductions, as the payment is not considered by banks as foreign income, as it is received in Indian Rupees. This is a huge issue!

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Paypal withdrawals for Indian companies impacted

Last month Paypal had sent out an email to all its customers stating that starting 29th July it will not be able to support online payment withdrawals to bank accounts in India. Due to this inconvenience, they were also ready to provide 5USD for any cheque withdrawal requested on or after 29th of July as a measure of compensation to its users.

Within two days of sending the notice, they sent a follow up mail that they were able to continue with the service. In this follow up mail they also clarified that they will continue to give the 5USD refund for the cheque withdrawals.

We have used Paypal in the past to receive payment amounts made by overseas clients. So we waited to try this out to experience what is new in the changes they have made to the withdrawal process.

Not any major changes. The only two changes we noticed were:

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