Is principal also taxable in tax saver fixed deposits

[samkapoor77]

I want to invest in fixed deposits but at the same time my motive is to save tax in the respective financial year. I went to HDFC to enquire and the relationship manager suggested me to deposit the desired amount in tax saver fixed deposit for 5 years. I want to know whether the interest is taxable or not. Will tax be charged on principal amount as well?

[samkapoor77]

Principal amount will not be taxable. Interest is taxable in the year in which it is earned. Bank will deduct tax at source in case you miss to submit form 15G/ 15H.

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