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