Phosphorus (P) is one of the major essential macronutrients required for plant growth, but its availability in soil is often limited due to fixation and presence in organic forms such as phytate. Phytase enzymes play a pivotal role in the hydrolysis of phytic acid, releasing inorganic phosphate that can be assimilated by plants. This study compares the phytase efficiency of selected legumes and cereals (cluster bean, mung bean, moth bean, pearl millet, and sorghum) under phosphorus-sufficient and phosphorus-deficient conditions. Simultaneously, it evaluates phytase activity from selected fungal isolates including Chaetomium globosum, Aspergillus ustus, Curvularia lunata, and Phoma spp., focusing on both intra- and extracellular activity. Results showed that legumes exhibited a higher phytase response under P-deficiency compared to cereals. Among fungi, Chaetomium globosum showed significantly higher extracellular phytase activity, correlating with superior inorganic P release from phytin and other organic P compounds. The study emphasizes the potential application of fungal phytase, particularly extracellular forms, in enhancing phosphorus bioavailability in arid and semi-arid soils, suggesting a complementary role for phytase-enriched biofertilizers.