As I understand, if one has claimed exemption under 80C for investing in tax saver FD, you can’t pre close the deposit for 5 years.

However, if I need the funds and I am ready to pay the income tax in the year of withdrawal, shouldn’t I be able to pre close FD (by paying pre closure penalty, if applicable)? When I ask banks, they say that pre closing tax saver FD is not impossible.

Please clarify