ITR-7 tax liability nearly triples to ₹1,043 crore in AY26 from ₹356 crore in five years, govt data shows

The total income tax liability of entities filing income tax return (ITR) Form 7 rose nearly threefold to ₹1,043 crore in Assessment Year (AY) 2025-26, from ₹356 crore in AY 2021-22, according to data presented by the government in Parliament on Tuesday.

The figures were disclosed by Minister of State for Finance Pankaj Chaudhary in a written reply in the Rajya Sabha. The data covers entities that file their returns through ITR-7, a form used by certain trusts, political parties, research institutions, universities and other specified entities.

The tax liability stood at ₹356 crore in AY21 and increased to ₹419 crore in AY23. It then jumped to ₹816 crore in AY24 before moderating slightly to ₹781 crore in AY25. In AY26, the liability rose again to ₹1,043 crore.

In absolute terms, the increase between AY21 and AY26 was ₹687 crore, translating into a rise of about 193%. The latest figure is also about 2.9 times the liability recorded five years earlier.

Which entities file ITR-7?

ITR-7 is not a general income tax return form for individual taxpayers. According to the Income Tax Department, it applies to persons, including companies, required to furnish returns under sections 139(4A), 139(4B), 139(4C) or 139(4D) of the Income Tax Act, 1961.

This includes income from property held under trust for charitable or religious purposes, political parties, certain research associations and other institutions covered under the specified provisions. Universities, colleges and other institutions referred to under section 35 are also covered.

For charitable and religious trusts, income derived from property held under trust can qualify for exemption, subject to the conditions prescribed under the tax law. Therefore, the rise in the aggregate tax liability does not mean that all income reported by ITR-7 filers is automatically taxable.

The Income Tax Department's ITR-7 guidance also sets out specific conditions for exemptions. For instance, political parties seeking exemption under section 13A have to meet prescribed conditions and furnish the return within the specified due date.

Tax liability more than doubled in two years

The government data shows that the sharpest increase during the period came between AY23 and AY24, when the aggregate liability climbed from ₹419 crore to ₹816 crore, an increase of nearly 95%.

The liability subsequently fell to ₹781 crore in AY25 before rising by around 34% to ₹1,043 crore in AY26.

The data, however, represents the combined tax liability of entities filing ITR-7 and does not by itself indicate the reason for the increase. Changes in taxable income, exemptions claimed, compliance levels, the composition of entities filing the form and other factors can influence the aggregate liability.

The latest ITR-7 form for AY 2026-27 continues to cover persons and companies required to file returns under sections 139(4A) to 139(4D).