According to latest update we got on comments and confirmed the same, PayPal India asked Indian users to enter PAN or Permanent Account Number details as soon as they Login and it is compulsory.
According to the FAQ here :
Why do you need a PAN number?
- PAN number is compulsory for all financial transactions as per Indian laws and regulations.
- PAN number provides you with a unique identification and makes it easier for PayPal to track your financial transactions.
- You need to have a PAN number (made mandatory by the Income Tax Department) in order to file for return of income as well as on all correspondence with any income tax authority in the country.
This is an excellent step by which RBI and Income tax both can get control over the illegal money that might be flowing inside India and a good option for Paypal customers so that can be clear on their Income Tax Return. Recently Paypal introduced Purpose Code which was required by the RBI to track transfer of funds from Paypal to Indian Bank Accounts. You can learn How to get a PAN Number.