Given Principal amount P = Rs 20000

Time period T = 1 year

Rate of interest R = 10% p.a.

**We know that simple interest = (P × T × R)/100**

**On substituting these values in above equation we get**

SI = (20000 × 1 × 10)/100

= Rs 2000

Amount deducted as income tax = 30% of 2000 = (30 × 2000)/100

= Rs 200

**Annual interest after tax deduction = Rs 2,000 − Rs 600 = Rs 1,400**