ITR-7 Tax Liability Skyrockets to ₹1,043 Crore by AY26
By ThePip Desk
Government data reveals a nearly threefold surge in ITR-7 tax liability, escalating from ₹356 crore (AY 2021-22) to ₹1,043 crore (AY 2025-26).
Entities required to file Income Tax Return (ITR) Form 7 witnessed a nearly threefold increase in their total income tax liability, rising from ₹356 crore in Assessment Year (AY) 2021-22 to ₹1,043 crore by AY 2025-26. This significant surge, an approximate 193% increase, was detailed by Minister of State for Finance Pankaj Chaudhary in the Rajya Sabha.
What ITR-7 Covers
ITR Form 7 is specifically designated for a range of entities required to furnish returns under specific sections of the Income Tax Act, 1961. This includes charitable and religious trusts, political parties, universities, colleges, and various research institutions.
Understanding the Surge in Liability
The absolute increase in tax liability amounted to ₹687 crore between AY 2021-22 and AY 2025-26. The data shows the sharpest increase occurred between AY 2023-24, when the aggregate liability jumped from ₹419 crore to ₹816 crore, marking an increase of nearly 95%.
Following this, the liability saw a slight moderation to ₹781 crore in AY 2024-25. However, it then rose again by about 34% to reach ₹1,043 crore in AY 2025-26.
Key Figures in Review
The total income tax liability for ITR-7 filers was ₹356 crore in AY 2021-22. This figure rose to ₹419 crore in AY 2022-23, then surged to ₹816 crore in AY 2023-24. After a minor dip to ₹781 crore in AY 2024-25, the liability culminated at ₹1,043 crore in AY 2025-26.
Factors Influencing the Increase
The government clarified that while the aggregate tax liability has risen substantially, this does not automatically imply all reported income is taxable, as exemptions are available under the tax law. Several factors contribute to this overall increase.
These contributing factors include changes in taxable income, the specific amount of exemptions claimed by entities, overall compliance levels, and shifts in the composition of entities utilizing the ITR-7 form for their tax filings.
This upward trend in ITR-7 tax liabilities highlights evolving financial landscapes and compliance dynamics among key non-profit and educational institutions. Ongoing analysis will likely focus on the specific drivers behind these shifts across different entity types.