Exemption from TDS on bank deposit interest means banks cannot refund tax paid; depositors must claim refund from tax authorities. Banks and specified co-operative banks are no longer required to deduct tax at source on interest paid to resident depositors under the newly inserted TDS exemption clause. If tax was already deducted and a certificate issued or the amount paid to Government, banks cannot refund directly; depositors must apply to income-tax authorities for refund. If deduction occurred but no certificate was issued and no payment made to Government, the bank may write back the entry to nullify the deduction.