Bank interest

Please guide me in following: (AY 2010-11)

1. My company deducted 23000 TDS from my salary in lieu of 19000 & issued form 16 saying refund of 4000.
2. I earned interest from bank FDs and saving a/c of 9000, whether I will have to pay self assessment tax on challan 260? or I would mention 9000 as income from other sources in ITR 1 and reduce my refund (4000-1000=3000)
3. Which way is correct?

Thanks in advance

Varun Yalvatkar