Looks like the speculation of PayPal getting banned again for transfer of money to Indian was right. According to the mail we received late night PayPal clearly says that from From July 29, 2010 onwards, you will only be able to request for a cheque withdrawal of funds from your PayPal account.
The email was sent by PayPal Asia Team and there is no exact reason decalred except that they are try to trying to restore the electronic withdraw service.
PayPal is one of the most commonly used service in India through which many freelancers, designers and bloggers get money to bank account but it seems Government wasnt very sure how it was coming as PayPal is only a middle man.
How you should get money to bank account ?
First and foremost, ask your client for wire transfer. This is the best option you have as most of tha banks have this facility. Also doing this you will get better exchange rate for dollar.
If you cannot do it ask your clients to send you dollar check. This will be useful as you can claim for Form 16 or Foreign remittance in your Income Tax.
If you don’t want both of the above, PayPal is ready to send you checks.