Step 1: Interpret the stress state.
On the left diagram, the point is subjected to pure shear stress $\tau_0$ (positive on top surface, negative on side surface). This is the classical case of a pure shear stress element.
Step 2: Principal stresses in pure shear.
For pure shear, the principal stresses are:
\[
\sigma_1 = +\tau_0, \sigma_2 = -\tau_0
\]
The directions of these principal stresses are rotated by $45^\circ$ relative to the original coordinate axes.
Step 3: Match with figure on the right.
On the right-hand rotated square (diamond orientation), the stresses are shown along directions rotated $45^\circ$ from the original axes. This corresponds to the principal axes.
Therefore,
\[
\sigma_1 = \tau_0, \sigma_2 = -\tau_0
\]
Final Answer:
\[
\boxed{\tau_0 \text{ and } -\tau_0}
\]