Income Tax Ordinance, 2001 — Section 147: Advance tax paid by the taxpayer

147. Advance tax paid by the taxpayer.— (1) Subject to sub-section (2), every taxpayer 1[whose income was charged to tax for the latest tax year under this Ordinance or latest assessment year under the repealed Ordinance] other than – 2[ ]

(b)income chargeable to tax under sections 5, 6 and 7; 3[ ]

(c)income subject to deduction of tax at source under section 149; 4[and] Chapter X – Procedure 1[ ] 2[(4) Where the taxpayer is 3[an association of persons or] a company, the amount of advance tax due for a quarter shall be computed according to the following formula, namely: (A x B/C) –D Where – A is the taxpayer’s turnover for the quarter 4[:] 5[Provided that where the taxpayer fails to provide turnover or the turnover for the quarter is not known, it shall be taken to be one-fourth of one hundred and 6[twenty] percent of the turnover of the latest tax year for which a return has been filed;] B is the tax assessed to the taxpayer for the latest tax year Chapter X – Procedure 1[“Explanation.- For removal of doubt it is clarified that tax assessed includes tax under sections 2[4C,] 113 and 113C.”] C is the taxpayer’s turnover for the latest tax year; and D is the tax paid in the quarter for which a tax credit is allowed under section 1683[ ].] 4[(4A) Any taxpayer 5[including a banking company] who is required to make payment of advance tax in accordance with sub-section (4), shall estimate the tax payable for the relevant tax year, at any time before the second installment is due. In case the tax payable is likely to be more than the amount that the taxpayer 6[including a banking company] is required to pay under sub-section (4), the taxpayer 7[including a banking company] shall furnish to the Commissioner on or before the due date of the second quarter an estimate of the amount of tax payable by the taxpayer 8[including a banking company] and thereafter pay fifty per cent of such amount by the due date of the second quarter of the tax year after making adjustment for the amount, if any, already paid in terms of sub-section (4). The remaining fifty per cent of the estimate shall be paid after the second quarter in two equal installments payable by the due date of the third and fourth quarter of the tax year.”] Chapter X – Procedure 1[(2[4B]) Where the taxpayer is an individual 3[] having latest assessed income of 4[ 5[one million] rupees or more as determined under sub-section (2), the amount of advance tax due for a quarter shall be computed according to the following formula, namely: “(A/4) - B Where – A is the tax assessed to the taxpayer for the latest tax year or latest assessment year under the repealed Ordinance; and B is the tax paid in the quarter for which a tax credit is allowed under section 168, other than tax deducted under section 149 6[ ].] 7[Explanation. – For removal of doubt, it is clarified that tax assessed includes tax liability under section 4C.]

(5)Advance tax is payable by 8[an individual 9[]] to the Commissioner

(a)in respect of the September quarter, on or 10[before] the 11[15th day of September];

(b)in respect of the December quarter, on or before the 12[15th day of December];

(c)in respect of the March quarter, on or before the 13[15th day of March]; and

(d)in respect of the June quarter, on or before the 14[15th day of June]. 1 Inserted by Finance Act, 2003. 2 Sub-section (4A) re-numbered by the Finance Act, 2006. 3 The words “or an association of persons” omitted by the Finance Act, 2010. 4 The word “two” substituted by the Finance Act, 2010. 5 The word “five hundred thousand” substituted by the Finance Act 2017. 6 The words and figure “or 155” omitted by the Finance Act, 2013. 7 Explanation added by the Finance Act, 2023. 8 The words “a taxpayer” substituted by the Finance Act, 2009. 9 The words “or an association of persons” omitted by the Finance Act, 2010. 10 The word “by” substituted by the Finance Act, 2005. 11 The figure and words “7th day of October” substituted by the Finance Act, 2004. 12 The figure and words “7th day of January” substituted by the Finance Act, 2004. 13 The figure and words “7th day of April” substituted by the Finance Act, 2004. 14 The figure and words “21st day of June” substituted by the Finance Act, 2004. 299 Chapter X – Procedure 1[(5A) Advance tax shall be payable by an association of persons or a company to the Commissioner

(a)in respect of the September quarter, on or before the 25th day of September;

(b)in respect of the December quarter, on or before the 25th day of December;

(c)in respect of the March quarter, on or before the 25th day of March; and

(d)in respect of the June quarter, on or before the 15th day of June.] 2[(5B) Adjustable advance tax on capital gain from sale of securities shall be chargeable as under, namely: TABLE Chapter X – Procedure 1[(5C) Notwithstanding anything contained in this section, every person deriving income from the business of –

(i)construction and disposal of residential, commercial or other buildings; or

(ii)development and sale of residential, commercial or other plots for itself or otherwise, shall be liable to pay adjustable advance tax on Project-by-Project basis, as may be prescribed, for the tax year as per the rates specified in Part IIB of the First Schedule in four equal installments: Provided that such advance tax shall be payable to the Commissioner in accordance with sub-sections (5) and (5A): Provided further that the provisions of sub-sections (7) to (10) shall mutatis mutandis apply.] 2[(6) If any taxpayer who is required to make payment of advance tax under sub-section (1) estimates at any time before the last installment is due, that the tax payable by him for the relevant tax year is likely to be less than the amount he is required to pay under sub-section (1), the taxpayer may furnish to the Commissioner an estimate of the amount of the tax payable by him, and thereafter pay such estimated amount, as reduced by the amount, if any, already paid under sub-section (1), in equal installments on such dates as have not expired 3[:] Chapter X – Procedure 1[(6A) Notwithstanding anything contained in this section, where the taxpayer is a company or an association of persons, advance tax shall be payable by it in the absence of last assessed income or declared turnover also. The taxpayer shall estimate the amount of advance tax payable on the basis of quarterly turnover of the company or an association of persons, as the case may be, and thereafter pay such amount after,

(a)taking into account tax payable under 2[sections 113 and 113C] as provided in sub-section (4AA); and

(b)making adjustment for the amount (if any) already paid.] 3[ ] 4[ ] 5[(6B) Where an estimate of the amount of tax payable has been filed by the taxpayer under sub-section (6) as the case may be, the estimate shall contain turnover for the completed quarters of the relevant tax year, estimated turnover for the remaining quarters, supporting evidence of expenses or deductions in computing income, evidence of tax payments and tax credits and computation of estimated taxable income: Provided that where the Commissioner is not satisfied with the documentary evidence provided or where an estimate of the amount of tax payable is not accompanied by details mentioned in this sub-section, the Commissioner may reject the estimate after providing an opportunity of being heard to the taxpayer and the taxpayer shall pay advance tax according to the formula set out in sub section (4) or sub-section (4B), as the case may be. (6C) Notwithstanding anything contained in this Ordinance, the persons specified in sub-sections (1), (3), (3A), (3B) and (3C) of section 154 shall, at the time of realization of foreign exchange proceeds, or realization of the proceeds on account of sale of goods, or export of goods, or at the time of making payment to 1 Sub-section (6A) substituted by the Finance Act, 2009. The substituted sub-section (6A) read as follows: “(6A) Notwithstanding anything contained in this section, where the taxpayer is a company, advance tax shall be payable by it in the absence of last assessed income also. The taxpayer shall estimate the amount of advance tax payable on the basis of estimated Inserted by the Finance Act, 2009.” 2 The expression “section 113” substituted by the Finance Act, 2016. 3 Clause (a) omitted by the Finance Act, 2008. The omitted clause (a) read as follows: “(a) taking into account tax payable under section 113 as provided in sub-section (4AA);” 4 Clause (b) omitted by the Finance Act, 2008. The omitted clause (b) read as follows: “(b) making adjustment for the amount (if any) already paid.” 5 New sub-sections (6B) and (6C) inserted by the Finance Act, 2024. 302 Chapter X – Procedure an indirect exporter, or clearing of goods exported, respectively, deduct or collect, as the case may be, advance income tax under this section at the rate of one percent of such foreign exchange proceeds, or export proceeds, or exports, or payment, in addition to tax collectable or deductible under section 154 of this Ordinance.]

(7)The provisions of this Ordinance shall apply to any advance tax due under this section as if the amount due were tax due under an assessment order. 1[(7A) The Board may prescribe the manner for furnishing of the estimate and calculation of the amount of tax payable under this section through Iris or any other automated system specified by the Board.]

(8)A taxpayer who has paid advance tax under this section for a tax year shall be allowed a tax credit for that tax in computing the tax due by the taxpayer on the taxable income of the taxpayer for that year.

(9)A tax credit allowed for advance tax paid under this section shall be applied in accordance with sub-section (3) of section 4.

(10)A tax credit or part of a tax credit allowed under this section for a tax year that is not able to be credited under sub-section (3) of section 4 for the year shall be refunded to the taxpayer in accordance with section 170. 2[ ]