diff --git a/.coveragerc b/.coveragerc
deleted file mode 100644
index e570d9403b..0000000000
--- a/.coveragerc
+++ /dev/null
@@ -1,23 +0,0 @@
-[run]
-omit =
-    tests/*
-    .github/*
-    commands/*
-    **/test_*.py
-
-[report]
-exclude_lines =
-    pragma: no cover
-    if TYPE_CHECKING:
-
-exclude_also =
-    def __repr__
-    if self.debug:
-    if settings.DEBUG
-    raise AssertionError
-    raise NotImplementedError
-    if 0:
-    if __name__ == .__main__.:
-    if TYPE_CHECKING:
-    class .*\bProtocol\):
-    @(abc\.)?abstractmethod
diff --git a/frappe/coverage.py b/frappe/coverage.py
index 41253eed18..8b6fa7007d 100644
--- a/frappe/coverage.py
+++ b/frappe/coverage.py
@@ -18,7 +18,7 @@ STANDARD_EXCLUSIONS = [
 	"*.scss",
 	"*.vue",
 	"*.html",
-	"*/test_*",
+	"*/test_*/*",
 	"*/node_modules/*",
 	"*/doctype/*/*_dashboard.py",
 	"*/patches/*",
diff --git a/pyproject.toml b/pyproject.toml
index 10eb5fa8ab..68aa745128 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -130,7 +130,7 @@ dev = [
 ]
 test = [
     "unittest-xml-reporting~=3.2.0",
-    "coverage~=6.5.0",
+    "coverage~=7.10.0",
     "Faker~=18.10.1",
     "hypothesis~=6.77.0",
     "freezegun~=1.5.1",
@@ -148,7 +148,7 @@ skip_namespaces = [
 ]
 
 [tool.bench.dev-dependencies]
-coverage = "~=6.5.0"
+coverage = "~=7.10.0"
 Faker = "~=18.10.1"
 pyngrok = "~=6.0.0"
 unittest-xml-reporting = "~=3.2.0"