How to Receive and Send Money to India by Paypal

Recently I sent some money from United States to India using Paypal account. I have been sending money to india for quite some time and I must have tried at least four different ways. There are various ways in which NRI's or others can send money to India from US, e.g. by a Cheque, by wire transfer, using direct Remittance services like those offered by SBI Remit, ICICI Remit, HDFC Quick Remit, and other services. I will write in detail about each one by one. But in this post I will discuss about my experience about sending money to India by Paypal Account.
Send Money by Paypal
I opened an Account with Paypal India. In this way you can actually add your Indian Bank account to your paypal account. It is then possible to withdraw money to your Indian Bank account directly from your Paypal account! Yes, you cannot transfer funds from your Indian Bank Savings account to your paypal account but you can withdraw money. Here are the main steps if you want to send money to India by Paypal.

  1. Register with Paypal India. Open a 'Personal Paypal Account'. There are two other types of Paypal Accounts - Premier Paypal Account and Business Paypal Account. These you wont need as long as you are not interested in recieving money from others directly by credit card (e.g. if you are a merchant or a seller or want to accept donations directly on your site by credit card). All you need to open a Paypal Account is a valid Email Address.
  2. Add your Indian Bank Account to your Paypal Account.
  3. Add your U.S. Bank Account and/or a Credit Card and/or Debit Card to you Paypal Account.
  4. Add money to your Paypal Account either by a Credit Card or by direct debit from a U.S. Bank Account.
  5. Then click on Withdraw Funds tab in your Paypal Account and withdraw funds to your Bank account in India.
Here are some advantages and disadvantages of sending money to India by Paypal.
  1. Adding funds from U.S. bank account may take 5-6 days. Similarly sending money to your indian bank account may take another 5-7 business days. Thus it takes probably twice as much time to send money to India by Paypal than other direct remittance options listed above. However if a few days are not that crucial to you then it should not matter. Moreover if you add funds to Paypal by a Credit or a Debit Card, then the funds are added instantly. So in this case this is not a disadvantage at all.
  2. Paypal Foreign Exchange or Dollar Rupee rates are 2.5% below the current ongoing rate. As compared to this, other direct remit to India options offer a forex rate of something like 0.5% to 1% below the ongoing market rate. So if you are planning to send large amounts of money then this is a matter of concern. However the advantage is that the exchange rate is calculated right before you click on submit send money request button. So you can look at the rate and then decide whether you want to go ahead.
  3. One of the biggest advantage of sending money to India by Paypal is that you can use your credit card. So even if you want to send more money to India than what you currently have in your savings or checking account, you can use your credit card and pay your credit card bill in the next billing cycle!.
  4. There are limits to how much money you can send by paypal. You can 'confirm' your paypal account by adding a credit or debit card or a U.S. Bank Account. Once you have confirmed, the limit for withdrawing funds is maximum $2500 per month.
Apart from this, having a paypal account can be very useful. You can send money to anyone with an email address or receive money from others. If you have a website or a Blog, then having a paypal account becomes even more important because there are several money making options that require you to have a paypal account. If you have a different or related experience with sending money to India or any other country by Paypal, I encourage you to share it with others in a comment.

Articles on Money Transfer

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  • Xoom Money Transfer Review
  • Ikobo Visa - A new way to send money abroad where you send a re-loadable visa card to the beneficiary.
  • MoneyGram Money Transfer and Money Order service.

  • Online Remittance to India
  • SBI Remittance Review - My most preferred method of sending remitting money to India. Good exchange rates.
  • Send Money to India by Paypal
  • HDFC QuickRemit

  • External Links
    Western Union Money Transfer -
    A trusted way to send money where beneficiary collects cash from a Western Union location.
    MoneyGram - International Money Transfer and Money Order. You send money, beneficiary collects cash from a chosen MoneyGram agent or location.
    iKobo - Send Money Worldwide
    Money Transfer by ATM Card. Useful for those who have to send money frequently. Check foreign exchange rates on the homepage of iKobo.
    Xoom Money Transfer - Online Remittance from United States to various other countries. Xoom Fees are around $8 per transaction.

    Send Money to India
    ICICI Remit to India
    Online Money Transfer to India.
    ICICI Exchange rates.
    SBI Remittance
    Online Money Transfer to India.
    SBI exchange rates.
    Online Money Transfer to India.
    Remit2India exchange rates.
    HDFC Quick Remit
    Remit Money to India online from U.S., U.K., Europe and Singapore.
    HDFC Quick Remit exchange rates.
    CitiBank Online Remit
    Remit Money to India from US.

    I have been sending money to India for quite a few years. I have been involved in at least 50 money transfers to India and used 4 to 5 different methods of online remittance. Although I do make efforts to provide accurate information about services related to online remittance, none of the opinion, experience or reviews in this post should be used for making any decisions to remit money to India or any other country. It is easily possible that my experience or opinion about a particular remitting service is different from yours. It is your money that you want to remit. So please verify the information from your own authentic sources before making a choice for remitting your money. I do not accept any liability for incorrect or inaccurate information. Some of the links in the posts may be affiliate links, however the opinions and reviews presented in the post remain honest and unbiased.

    Apr 9, 2009


    Amit Shukla July 26, 2009 at 12:53 AM  

    hi, i have a doubt that is it necessary to give my correct specific address other than my country, as i am in a travel job with no specific location for long duration. Also i dont want to give address of my relatives.
    I am willing to give my phone number to them. Does Paypal verify address? Hope you help me out!!

    Investo Blog July 26, 2009 at 7:21 AM  

    The only verification Paypal does is to ask for a credit or debit card (VISA or Mastercard). If you have opened a paypal India account, you will neeed a billing address in India. I myself had a lot of headache with this. Verifying paypal account is important as it will increase the amount of money you can send from $500 to $2500.

    Amit Shukla July 27, 2009 at 11:00 PM  

    Thnks for ur info!!

    Sofia Norton July 29, 2009 at 11:40 AM  

    You can also use if you want to receive your money via Demand Draft. Xoom is one of the most fastest way to receive your Pay Pal money in your local currency via Demand draft, also you can use this service to send money to some one else, the only requirement is the recipient must have an account in any bank.

    Manish Jha August 1, 2009 at 8:20 PM  

    Hi, I have a small business in India where i will be receiving payments from US & UK in USD or GBP. Aprt from the transaction charges which paypal will charge, what is the forex rate they consider? Also say if my customer swipes online on 20th of July, then what date forex will paypal consider. What is that they charge for forex conversion apart from transaction charge.

    vishal July 25, 2010 at 12:28 PM  

    I withdrew my PayPal money earned during Financial year 2009-10 in May 2010. So, am i supposed to pay tax on that money right now(i mean before July 31st 2010) or during the assessment of this financial year(2010-11), that is, next year.

    Frankly, if i didn't receive any money in the bank, should i be required to pay tax on that ? I withdrew the money this year (may 2010) so logically, i should pay tax on that money during filing return next year. Please clear my doubt.

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