ITR-7 tax liability hits ₹1,043 crore, nearly triples in five years

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 conditions prescribed under tax law. The rise in aggregate tax liability does not mean all income reported by ITR-7 filers is automatically taxable. The Income Tax Department's ITR-7 guidance sets out specific conditions for exemptions. Political parties seeking exemption under section 13A must meet prescribed conditions and furnish the return within the specified due date.

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

The data 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).