In tax saving FD only interest is taxable or final amount?

gunturboy26 (Self Employed) (217 Points)

25 November 2016  

If we deposit 1,50,000 in tax saving FD scheme for 5 years, the final amount we will get after 5 years is 2,31,419 (assuming at 7% every year and compounding).

My question is, in the year the FD will be matured, would this final amount of 2,31,419 will be taxable or only the interest 81,419 is taxable. Because the tax expemtion of 1,50,000 under 80C is for the year in which it is deposited and the year it will mature will be 5 years later.

Thank you.