Services of banking correspondents under PMJDY out of tax loop

New Delhi: 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," a finance ministry statement 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.

A CBEC notification was also issued in this regard.

PMJDY, a national mission on financial inclusion, was announced by Prime Minister Narendra Modi in his Independence Day 2014 speech and was formally launched by him on August 28 the same year with the main objective of covering all households with at least one bank account per household across the country.

So far, over 18.7 crore accounts have been opened under the scheme.

As per RBI guidelines, the accounts that can be opened under PMJDY are basic savings bank deposit accounts (BSBDA) which can be of zero balance.

Deposit in accounts opened under the government's flagship financial inclusion programme has exceeded Rs 25,000 crore.