It is a common activity not only in India, but also in many other countries.
There are mainly 2 reasons why people throw coins into water:
1. Good Luck – All over the world people think that throwing coin into river or lake will bring Good Luck. And yes it does to little boys who collect coins from these water bodies.
2. Tradition – People throw coin because their elders used to do it. But do you know why people used to throw coins in Lake or River? Reason is previously coins were made of copper and copper cleans water. But nowadays coins are not copper, so coins should not be thrown into water.