Simplifying Tax for C.A's and Taxpayers
Notification No. 47/2016 Income Tax dated 17.06.2016

Notification No. 47/2016 Income Tax dated 17.06.2016

No tax to be deducted at source on bank guarantee commission, underwriting services charges, CMS service charges, etc, paid to bank, clearing corporation of India, national payment corporation of India, American express Banking Corp., USA, Western Union Financial services Incorporated, USA, Itz cash card ltd., Paymate India Private Limited, Sodexo SVC India Pvt ltd., Tech Mahindra Limited, Muthoot finance Limited, Vakrangee Limited, Weizmann Impex Service Enterprises Limited, etc.

In exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act, 1961 (43 of 1961) and in supersession of the notification of the Government of India, Ministry of Finance (Department of Revenue) number S.O. 3069 (E) dated 31st December, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), the Central Government hereby notifies that no deduction of tax under Chapter XVII of the said Act shall be made on the payments of the nature specified below, in case such payment is made by a person to a bank listed in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), excluding a foreign bank, or to any payment systems company authorized by the Reserve Bank of India under Sub-section (2) of Section 4 of the Payment and Settlement Systems Act, 2007 (51 of 2007), namely :-

(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.


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