No deduction of tax deducted at source (Section 197A) – on specified payment made by a person to bank listed in the second Schedule to the reserve bank of India Act, 1934(excluding a foreign bank).

A person not required to deduct tax deducted at source (TDS) where person made Specified payments to a

(i)         bank listed in the second schedule to the Reserve Bank of India Act, 1934, excluding a foreign bank or

(ii)             payment system company  authorised by the Reserve Bank of India under Sub-section (2) of Section 4 of the Payment and Settlement System Act, 2007

Specified payments are

(i)   bank guarantee commission;

(ii)  cash management service charges;

(iii)  depository charges on maintenance of DEMAT accounts;

(iv)  charges for warehousing services for commodities;

(v)   underwriting service charges;

(vi) clearing charges (MICR charges) including interchange fee or any other similar charges by whatever name called charged at the time of settlement or for clearing activities under the Payment and Settlement Systems Act, 2007;

(vii) credit card or debit card commission for transaction between merchant establishment and acquirer bank.

Notification No.47/2016, Dated 17^th June 2016.