Interest income

interest upto rs.10000 is exempt.

Normally it is taxable. But if you are a salaried employee, and you have no other source of income other than salary and interest from savings Bank A/c upto Rs. 10,000/- and TDS is deducted by the employer and no refund claim is there, then you need not file the returns. Hence it wont come under the tax sheild in this manner. Else, it is taxable,. There is no exemption as such.

@ nitin...as per budget 2012....interest income froms avings bank a/c upto Rs 10000 has been made tax free.

yes. thanks for the correction and information.. :-)