Tax on diamonds is removed (7)
I believe the answer is:
excised
'is removed' is the definition.
(I've seen this before)
'tax on diamonds' is the wordplay.
I cannot really see how this works, but
'tax' could be 'excise' (excise is a kind of tax) and 'excise' is located in the answer.
'diamonds' could be 'd' (abbreviation in bridge say) and 'd' is found within the answer.
This accounts for all the letters.
This may be the basis of the clue (or it may be nonsense).
Can you help me to learn more?
(Other definitions for excised that I've seen before include "Having charges" , "Cut out, removed by cutting away" , "Deleted" , "Taken out" .)