Services of banking correspondents under PMJDY out of tax loop

The government has exempted from tax the services of a banking correspondent for opening savings account under Jan Dhan Yojana, in a move aimed at promoting financial inclusion. "In order to promote financial inclusion, the government has exempted services provided by a business facilitator or a correspondent to a banking company with respect to basic savings bank deposit accounts covered by Pradhan Mantri Jan Dhan Yojana (PMJDY)...," a finance ministry statement said.

"This is by way of account opening, cash deposits, cash withdrawals, obtaining e-life certificates and Aadhar seeding in rural branches of banking companies from service tax," the ministry said. The services provided by any person as an intermediary to a business facilitator or a correspondent with respect to the above mentioned services have also been exempted from service tax, it added.