PayPal started asking for PAN or Permanent Account Number details as per government regulations to make sure the money is tracked. If you haven’t added your PAN number to PayPal, it should automatically prompt you. If not, then you need to submit KYC with PayPal along with PAN, if you receive international payments.
How to enter PAN details or KYC for PayPal India Account
- Visit the KYC Page for Indian Users. Make sure that you are signed in.
- Make sure your name in PayPal account and name on PAN are the same.
- You need to provide PAN, confirm email id, add a bank account, and then choose a purpose code
The Purpose code is essential, so your bank and the IT department get to know the reason you received the money. The purpose code will be highlighted to your bank, but they can also ask the details if its for the first time.
Once you submit the document, PayPal should be able to verify you instantly or may get back in 2-3 days.
Related: Learn How to get a PAN Number.
Dos of PayPal KYC
- Check that you have selected the right business type when creating your account
- Submit both sides of the documents if there are details on either side (Eg. Aadhar, Driving License, Passport, etc.)
- Make sure to submit personal and business details in PayPal account as per the documents you have
- Double-check that you have all the list of documents you need before starting the submission
Don’ts of PayPal KYC
- Submit document copies that are damaged, blurred or distorted
- Submit password-protected documents
- Enter personal details when business details are required, or vice versa
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 (mandatory by the Income Tax Department) to file for the return of income.
It 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 they can be clear on their Income Tax Return. Recently Paypal introduced Purpose Code, which was required by the RBI to track the transfer of funds from Paypal to Indian Bank Accounts.