Stress concentration is defined as the localization of high stress due to irregularities present in the component or sudden change in cross section. Stress concentration deteriorates the life of the component, reduces mechanical properties and leads to material wastage. Full scale tests are time consuming and expensive. Fatigue life modelling using finite elements can provide useful data during the conceptual stage of design. The work describes the variation in fatigue life of the transmission shaft made of AISI 1080 steel by changing the depth and distance of relief groove from the shaft shoulder. ANSYS was used for the simulation. Fatigue life of the transmission shaft with relief groove was compared with the fatigue life without a relief groove and sufficient increase in fatigue life was observed for transmission shaft with a relief groove.