Tax deduction on interest income applies at rates in force, with recipient-based thresholds and operational adjustment mechanisms.

Tax deduction at source on interest income under section 393(1), Table serial number 5, applies to interest on securities and specified categories of other interest at rates in force once applicable thresholds are exceeded. Banking, co-operative banking and notified Post Office deposits have a higher threshold for senior citizens. Rates in force are determined under the relevant Finance Act, with applicable treaty relief for non-residents. Branch-wise threshold computation is available where Core Banking Solutions have not been adopted, and in-year adjustment of excess or short deduction is permitted.

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