Fixed Deposit for tax saving needs to be created every year?

You have to go for a fresh FD every year if you want this benefit for tax purposes under section 80C.

The benefit is one time for the principal amount invested in this special FD.

So your money is blocked for 5 years in this scheme. Generally people will go for this option when they have investable funds which can be parked comfortably in banks in this type of FD for 5 years.

Ordinary FDs can be withdrawn prematurely anytime but this tax saving FD can not be withdrawn before 5 years.

You can choose from a Traditional Plan that pays interest monthly/quarterly basis your convenience or a Reinvestment Plan that pays interest compounded quarterly and reinvested with the principal amount.
Choose from a Traditional Plan that pays interest monthly/quarterly basis your convenience or a Reinvestment P
You can make a minimum investment of ?10,000 and maximum ?150,000 for a minimum duration of 5 years. The interest you are getting on this investment is taxable. you will get a tax exemption on your savings under Section 80C of Income Tax Act, 1961.
As per the Term deposit scheme, 2006, issued by the Central Government of India, the above Fixed Deposit scheme will not have the following facilities:
Premature withdrawal, Loan against Fixed Deposit and Auto-renewal facility.
The amount invested in this will be eligible for tax exemption for only the year of investment.

Yes. For availing tax benefit under Section 80C, you have to invest Rs. 1.5 lakh in every financial year. Previous 80C investment won't be taken into account. So, instead of low-yielding FDs, it would be more prudent to invest in PPF/GPF (for conservative customers) and in ELSS (for younger customers who are ready to take a reasonable risk). In both cases, the lock-in period is much less. Further, the amount invested in Provident Funds can't be attached under any eventuality.

Under section 80C, A deduction of Rs. 1,20,000 can be claimed from your total income. In simple terms, you can reduce up to Rs. 1,50,000 from your total taxable income through section 80C. This deduction is allowed to an individual or an HUF.

Any exemptions/rebates etc are given as per the rules and eligibility only for the particular Financial Year and for the investment made out from the income of that particular FY.

Hence the Tax saving investment made for say FY 2018-19 will be given exemption to the eligible extent only for that FY. For the next and ensuing FY s you have to invest as per the rules existing for those FYs as per eligibility and ceiling. The tax savings deposits as of now have a lock-in period of 5 years. That means you have to keep the FD for 5 years before which you cannot close it.

So for each FY you should invest separately that year every year and keep the FD locked-in for its full term of 5 years from date of opening to get the exemption. The eligibility clauses, eligible investments and exemptions, terms and conditions may undergo changes also as per the budget or Finance bills each year.

If you want to get tax benefits from FD s then you have to invest it for five years. But main drawback of these types of investment is that a lumpsome amount of money will be get stuck for a long time.
Now you have asked that will it can be used for more than once or not. You can show it for getting tax benefit for one time only. So, if you want to get deduction from tax in the next or another financial year then you have to show another FD which is invested for five years. You can not use a single FD for getting tax benefit in multiple times.

If you want to get benefits from this scheme then you have to wait for 5years.it is a longtime investment. It is very good for girls. If they parents want to keep their money to their childeen for their future career.

As per the existing rules the contribution eligible for tax exemption in this type of tax saving FD is only applicable for the year in which it is opened and the money will be blocked for 5 years.

Alternatively, one can invest in mutual funds - tax saving equity linked savings scheme (ELSS), where the amount is only locked for a period of 3 years. Only thing is the gains will not be assured in this type of investments as they can be very high or low depending upon the share market movement and time of selling of these MF units by the holder.

Any fixed deposit to be made with the Bank with the provision of tax - saving will remain locked for a period of five years and the concession in respect of 80 C can be availed up to a maximum deposit of Rs 1.5 lakh. Any rebate by way of such fixed deposit is applicable for the current year ie 2018 - 19.
To avail the same concessions with respect to Income - tax in the next year up to limit of 1.5 lakh, you are required to make a fresh deposit.
Such deposits with the Banks does not appear to be attractive when other instruments in the mutual fund may offer you an attractive gain and the locking - period of the same is just three years.

The tax saving schemes are always applied or considered on your earnings during that particular financial year. If you open a tex saving FD between April 18-March 19, this will count for that year only and you cannot use it for next financial year as this amount was earned by you last year only. So you need to invest separately every year.
Apart from these tax saving FDs, you can invest in PPF accounts which can be started with Rs. 1000/- and you can get tax benefit up to 150000/- deposit. So, you will be having the flexibility to invest as per your suitability.

There are many tax saving options out for you.

1. Tax saving FD
2. PPF and EPF
3. Sunkanya samridhi if you have a daughter
4. Post office deposits.
5. Bonds in specific govt schemes.

These are some of the options that with each years fresh investment can definitely helps you with the savings. In case of FD you have to create new each year for the benefit from the taxes. In case of the PPF, that's much more better contribution if you ask me.

Basically, can we use same FD for next 5 years or every year we need to create it?

Having read your post and question carefully. The answer is NO. Whatever investment we do in one financial year is what can be clubbed or used alone for qualifying tax exemption for that financial year.

The Indian tax rules have few types of investment allowed for tax exemption under the Income tax act.
The most common ones are
Fixed Deposits
National savings scheme
Provident funds
Post office bonds
Equity linked savings schemes

One can avail a tax exemption upto 1.5 Lakhs under the section 80C. Depending on the risk appetite, lock-in period etc people choose one of the above.
.
If you choose a safe investment then you have the option of FD or NSC. IF you have money to be locked in for 5 years, the NSC would be a better option because the interest is re-invested. For years 1-4 the interest earned in NSC can be shown as re-investment and hence reduce the overall tax paid when compared to that of a FD.