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Condition monitoring of different power equipment with noninvasive and nondestructive techniques, such as dielectric spectroscopy, has become one of the important facets of power system reliability. This is increasingly becoming essential for predicting the insulation condition and probable future failure of power apparatus. Noise contamination, being one of the major problems in these measurements, should be treated judiciously. The paper proposes a simple but versatile real-time denoising scheme for this kind of signals of dielectric spectroscopy in time domain namely, polarization-depolarization current (PDC) and recovery voltage (RV), through a hybrid filtering technique using weighted median (WM) filter along with low pass digital infinite impulse response (IIR) filter. The proposed filter is able to remove real- life, random, high frequency noises as well as spurious impulse signals while preserving any step change in the signal. The performance of the proposed scheme is judged through experimentation using a real-time, automated computer controlled test setup for condition monitoring of transformers and the results show that it performs efficiently on different types of signals of dielectric spectroscopy in time domain, namely, PDC and RV.