You're paying more tax. It shows

In the past few months, many people have received several SMSs and emails from the tax department—sometimes even twice or thrice a day—reminding them to file tax returns before 31 March 2018. The messages seem to have hit home in many cases.

The number of tax returns filed has increased by more than a quarter (26%)—from 54.3 million in FY17 to 68.4 million in FY18, according to data released by the Central Board of Direct Taxes (CBDT). There has been a continuous upward movement in the number of tax returns filed in the past 4 years. Between FY14 and FY18, this number has jumped 80.5%. About 38 million tax returns were filed in FY14, and about 68 million were filed in FY18. This includes a large number of new filers too. There were almost 10 million new filers in FY18 (as on 30 March 2018) versus 8.5 million in FY17.

The provisional figure of net direct tax collections for financial year 2017-18 was Rs9.95 trillion—17.1% higher than the net collections in FY17. Net collection is total tax collected minus refunds made to tax payers.

The net direct tax collection has also crossed the budget estimate of Rs9.80 trillion, but remained a tad lower (about 1%) of the revised budget estimates of Rs10.05 trillion.

In FY18, of total gross collection of Rs11.44 trillion, Rs1.49 trillion (provisional) went towards refunds.

The expansion can be attributed to the efforts that the tax department has been making, not only to widen the tax payer base but also to curb tax evasion. What must be noted here is that more people are filing tax returns and paying taxes, even though the basic tax exemption limit has not been raised in recent years; it was last raised in 2014. In fact, surcharge has been added and only a few rebates have been announced for people earning less than Rs5 lakh.

Apart from reminding people to file tax returns, the tax department has intensified data analysis to check tax defaulters. Laws have been changed, and various penalties for delay and non-filing were imposed. Read more about the penalties for not paying tax on time here.

FY19 has just started and there are a few new tax rules that you must remember; not only for when you invest but also for when you file your next tax return. There is now a long-term capital gains tax of 10% on equity instruments, which is expected to further boost direct tax collection. There are also various expenses and investments that qualify for tax deduction and bring down your tax liability. It is ideal to plan your tax-saving investments and expenses at the beginning of a new FY, instead of a last-minute scramble.