Filing a return
Advance Tax in Pakistan: Who Pays and When
Advance tax under section 147 is paid quarterly by taxpayers whose latest assessed taxable income, excluding salary already withheld, reaches one million rupees. An individual pays by the fifteenth of September, December, March and June. An association or company pays by the twenty-fifth for the first three quarters and the fifteenth in June.
We do this for clients:Withholding Tax Statements in Pakistan
Where these figures come from
- Statutory basis
- Income Tax Ordinance, 2001, as amended by the Finance Act 2026, for tax year 2027 (1 July 2026 to 30 June 2027).
- Last checked against the statute
- by BarrioVibe, which files income tax returns through FBR IRIS.
These figures are an estimate computed from the rates above, not tax advice for your situation. Your return depends on facts a form cannot see, so treat the number as a starting point and speak to us before you file on it.
When each instalment falls due
Sections 147(5) and 147(5A). Note that June is the exception in both columns.
| Quarter | Individual | Association or company |
|---|---|---|
| September | 15 September | 25 September |
| December | 15 December | 25 December |
| March | 15 March | 25 March |
| June | 15 June | 15 June |
How an individual's instalment is computed
Section 147(4B) gives the formula for an individual with latest assessed income of one million rupees or more: A divided by four, less B. A is the tax assessed for the latest tax year. B is tax already paid in that quarter and creditable under section 168, other than tax deducted under section 149.
So it is last year's assessed tax, spread across four quarters, reduced by whatever has already been collected from you during the quarter. The exclusion of section 149 salary deductions from B is deliberate and matches the exclusion of salary from the threshold itself.
Where the estimate matters
The formula runs on last year, which is a problem in a year when income has moved. Section 147 provides for an estimate: a taxpayer required to pay under the company formula must estimate the tax payable for the relevant year before the second instalment is due, and where the figure is likely to exceed what the formula produces, furnish that estimate and pay half of it by the second quarter, with the remainder in two equal instalments in the third and fourth quarters.
Note the direction. The machinery is aimed at a year when income has RISEN above last year's, not at reducing instalments in a bad year. A business having a poor year should take advice rather than assume it can simply pay less.
Advance tax is a credit, not an extra tax
Everything paid under section 147 is creditable against your liability for the year when you file. It is a timing mechanism rather than an additional charge, which is worth stating because the quarterly demand feels like a new tax when it first arrives.
Where the instalments exceed what the return eventually shows, the excess is recoverable through the return in the ordinary way. Where they fall short, the balance is due on the return's due date.
Questions
The questionspeople ask
Who has to pay advance tax in Pakistan?
A taxpayer whose income was charged to tax for the latest tax year, subject to exclusions. For an individual, section 147(2) disapplies the section where latest assessed taxable income, excluding salary withheld under section 149 and certain other categories, is less than one million rupees.
When is advance tax due?
For an individual, 15 September, 15 December, 15 March and 15 June. For an association of persons or a company, 25 September, 25 December, 25 March and 15 June. Only the June quarter is the same for both.
Do salaried people pay advance tax?
Generally not. Section 147(1)(c) excludes income subject to section 149 salary withholding, and the section 147(2) threshold is measured excluding it, so a salaried person whose employer deducts correctly does not reach the test on salary alone.
I just started freelancing. Do I owe advance tax this year?
Usually not. The threshold in section 147(2) is measured on your LATEST ASSESSED taxable income, so with no assessed year behind you there is nothing for the section to compute an instalment from. It generally begins to apply once a year has been assessed.
How is an individual's advance tax instalment calculated?
Under section 147(4B), as A divided by four less B, where A is the tax assessed for the latest tax year and B is tax already paid in the quarter creditable under section 168 other than section 149 salary deductions.
What happens if I miss an advance tax instalment?
The section 205 default surcharge applies, at twelve per cent a year or KIBOR plus three per cent, whichever is higher, with advance tax dealt with in section 205(1A). That is separate from the section 182 penalty for late filing.
Is advance tax an extra tax?
No, it is a timing mechanism. Everything paid under section 147 is creditable against your liability for the year, and any excess is recoverable through your return.
Does super tax count toward advance tax?
Yes. Section 147(4AA) provides that liability under sections 4C, 113 and 113C is taken into account in working out the advance tax liability, so super tax and minimum turnover tax form part of the figure spread across the quarters.
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Rather have someone handle it?
We file returns through IRIS every day. If the answer above raises a question about your own case, that is the conversation to have before the deadline rather than after it.