Public Sector Bank – Section 2(87) | Income-tax Act, 2025 vs 1961

§ 2(87) · Income-tax Act, 2025

Public sector bank

ITA 2025 · 2(87) ★ New in 2025
Definition — Section 2(87)

Means the State Bank of India constituted under the State Bank of India Act, 1955; a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 or 1980; and a bank included in the category "other public sector banks" by the Reserve Bank of India. In plain terms: (1) SBI — India's largest public sector bank; (2) the 11 nationalised banks such as Bank of Baroda, Bank of India, Canara Bank, Punjab National Bank etc.; and (3) any other bank the RBI classifies as a public sector bank.

Act Comparison
Income-tax Act, 2025
2(87)
Public sector bank
Income-tax Act, 1961
—
No direct equivalent
Newly defined in 2025
Key Points
  • New explicit definition in the 2025 Act
  • Relevant for TDS threshold differences — banks have higher thresholds in some provisions
  • Different from 'scheduled bank' — PSB is a subset of scheduled banks
💡 Practical Note

Public sector banks have special provisions in TDS rules under the 2025 Act — interest thresholds are higher for PSBs than for private banks, corresponding to Section 194A of the 1961 Act.

Published by Simplified Tax India — Clear, section-wise comparison of Income-tax Acts. ← Back to Section 2 Definitions Table
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