TDS – no deduction in certain cases – specified payments u/s. 197A (1F) (212 Taxman (st.) 12)

The Central Government vide Notification No. 56/2012 dated 31/12/2012 notifies that no deduction of tax under chapter XVII of the Income-tax Act shall be made on the payments of the nature specified below, in case such payment is made by person to a bank listed in the second schedule to the Reserve Bank of India Act, excluding of Foreign Bank. This notification came into effect from 1/1/2013. 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); vii. Credit card or debit card commission for transaction between the merchant establishment and acquirer bank.