New Delhi, March 30 -- As the new Income Tax Act 2025 is set to come into effect on 1 April 2026, the Central Board of Direct Taxes (CBDT) on Monday issued a clarification on how tax deducted at source (TDS) will apply to interest earned from banks or the post office deposits.

Addressing concerns over whether some banking institutions will continue to enjoy threshold-based exemptions, the department said that banks regulated under the Banking Regulation Act, 1949, will now be required to deduct TDS on interest incomes if it exceeds the specific threshold.

News agency PTI reported that under the Income Tax law, TDS is to be deducted if the interest income from bank or post office deposits exceeds Rs.50,000 for ordinary citizens, or Rs.1 ...