The total income tax liability of entities filing income tax return ITR-7 has experienced a dramatic increase, reaching ₹1,043 crore in Assessment Year 2025-26. According to data presented to Parliament by Minister of State for Finance Pankaj Chaudhary, this figure represents approximately three times the liability recorded five years ago. The substantial growth reflects the expanding obligations faced by trusts, political organizations, and academic institutions submitting ITR-7 returns, despite available tax exemptions under the Income Tax Act. The Finance Ministry informed Parliament that this nearly threefold increase over five years highlights the growing financial obligations of entities engaged in charitable and educational activities.
The tax liability data reveals a consistent upward trajectory over the past five years. As reported by Mint, the liability increased from ₹356 crore in AY 2021-22 to ₹1,043 crore in AY 26. The figures show a steady climb with ₹419 crore in AY 2022-23, ₹816 crore in AY 2023-24, and ₹781 crore in AY 2024-25. In absolute terms, the increase between AY21 and AY26 was ₹687 crore, translating to a rise of about 193%. This progressive increase demonstrates the growing financial obligations of entities filing ITR-7 returns, even as these entities are eligible for tax exemptions under the Income Tax Act, 1961 provisions. The latest assessment year data shows this trend has continued with the liability reaching ₹1,043 crore in AY 2025-26.
ITR-7 returns are filed by specific categories of entities that engage in charitable, religious, educational, and research activities. According to the Income Tax Act, 1961 provisions, income derived from property held under trust wholly for charitable or religious purposes remains exempt from income tax, subject to fulfilling prescribed conditions. The entities include charitable or religious trusts, political parties, universities, colleges, research institutions, and organizations involved in providing relief to the poor, education, religious, medical, and yoga activities. As per the latest parliamentary disclosure, these returns cover activities that inter alia include providing relief to the poor, education, religious, medical, and yoga activities. Mint reports that ITR-7 is not a general income tax return form for individual taxpayers but 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.
The comprehensive tax liability data was shared with Parliament during a written reply to the Rajya Sabha by Minister of State for Finance Pankaj Chaudhary. The minister provided detailed information about the income tax liability of entities filing income tax return in Form ITR-7 over the last five years. This parliamentary disclosure provides transparency into the tax obligations of entities engaged in charitable and educational activities, with the latest data showing the liability has tripled from the previous assessment year. The disclosure covers entities that file ITR-7 returns, which include activities of providing relief to the poor, education, religious, medical, and yoga activities, despite available tax exemptions under the Income Tax Act, 1961 provisions. The information highlights the significant financial shift in the tax burden for these entities over the five-year period. The data represents the combined tax liability of entities filing ITR-7 and does not by itself indicate the reason for the increase, with changes in taxable income, exemptions claimed, compliance levels, and other factors influencing the aggregate liability.
