Taxability of interest on saving bank

For example :An individual 'X' who is in 20% slab rate of income tax. HAs IFOS from Interest on saving bank A/c of Rs. 30,000/-. So the right way to compute his tax 1) 30,000 X 20/100 or 2) 30,000 X 20/120.

Any option you choose pls explain why?

thanks in advance guys