Pakistan Advance Tax 2026: Calculate & Pay Before March 15 Deadline

Advance tax under section 147 of the Income Tax Ordinance, 2001 is income tax you pay in four quarterly instalments during the tax year, instead of in one lump sum when you file your return. It applies to companies, and to AOPs, and to individuals whose latest assessed taxable income (excluding salary and final-tax income) is Rs 1,000,000 or more. The March instalment is the third of the four. The method on this page works the same way for the September, December and June instalments. Each instalment falls due in the last month of its quarter, but the exact day depends on your taxpayer category.

What advance tax is

Advance tax is a prepayment of your own income tax for the current tax year. You work out roughly what you'll owe for the year and pay it in instalments. When you file your annual return, the instalments are claimed as tax already paid, in the same way as withholding tax (WHT).

It isn't the same thing as withholding tax, though the two interact. WHT is deducted by someone paying you. Advance tax is what you pay FBR directly. Adjustable WHT deducted during the year counts towards the tax you owe, so it reduces the advance tax you have to pay yourself.

A reminder on years: tax year 2026 is income from 1 July 2025 to 30 June 2026, so the March 2026 instalment belonged to tax year 2026. Tax year 2027 runs from 1 July 2026 to 30 June 2027, and its instalments fall in September 2026, December 2026, March 2027 and June 2027.

Who has to pay

• Companies are generally required to pay advance tax.
• Individuals and AOPs have to pay advance tax if they were charged to tax in the latest tax year. For individuals only, there's an income threshold: you're exempt if your latest assessed taxable income, excluding income taxed under the final tax regime, is below Rs 1,000,000 (section 147(2) of the Income Tax Ordinance, 2001). AOPs don't get this income-based exemption.
• Salaried individuals whose only income is salary, with tax deducted by the employer under section 149, generally don't pay separate advance tax instalments. If you also have business, rental or other income that isn't fully covered by tax deducted at source, check whether you've crossed the threshold.
• Income under the final tax regime is left out of the advance tax calculation, because the tax deducted on it already settles the liability.

Instalment due dates

Advance tax is paid quarterly on the normal July–June tax year:

The exact day depends on your taxpayer category, under section 147(5) and (5A) of the Income Tax Ordinance, 2001. For the September, December and March instalments, individuals pay by the 15th of the month, while AOPs and companies pay by the 25th. For the June instalment, everyone — individuals, AOPs and companies — pays by the 15th. If a due date lands on a holiday, check FBR's announcements rather than assuming it moves.

March 15 or March 25?

This page's title uses March 15 because that's the due date for individuals under section 147(5). AOPs and companies pay by March 25 under section 147(5A). If you're unsure which category applies to you, paying by the earlier date costs you nothing, while paying late can mean default surcharge.

Don't plan around an extension. If FBR ever moves a date, it will announce it.

How to calculate your instalment

This is the simplified method most taxpayers use to budget for advance tax. Section 147 sets out the exact rules, including how and when to file a revised estimate, so get your adviser to confirm your figures if your affairs are complicated.

1. Estimate your taxable income for the whole tax year. Include business or professional income, property income, capital gains, other sources, and salary if you have it alongside other income. Leave out income under the final tax regime, and subtract any deductible allowances you're entitled to.
2. Work out the tax on that income using the slabs for your category. The rates for salaried and non-salaried individuals are different, and companies are taxed separately. Our tax slabs page has the individual slab tables for both years. Subtract any tax credits you're entitled to.
3. Subtract the adjustable tax you expect to have deducted at source during the year: on bank profit, contracts, services, utility bills and so on, plus any tax your bank collects on card payments abroad under section 236Y. Keep the certificates, because you'll need them to claim the credit in your return.
4. Divide the balance into four instalments. Each quarter normally carries a quarter of the balance.
5. Re-check before each instalment. If your income rises or falls during the year, the law lets you revise your estimate and adjust the remaining instalments. By the June instalment you should have a clear picture of the year and can bring your payments into line with your expected liability.

Worked example

These figures are for illustration only.

• Estimated tax for the year on your expected income: Rs 300,000
• Adjustable tax you expect to be deducted at source during the year: Rs 50,000
• Balance to pay as advance tax: Rs 300,000 − Rs 50,000 = Rs 250,000
• Each quarterly instalment: Rs 250,000 ÷ 4 = Rs 62,500

Now suppose that by June your revised estimate of the tax you need to pay yourself for the year (after tax deducted at source) is Rs 300,000, and you've already paid Rs 200,000 across the first three instalments. Your June instalment is then Rs 300,000 − Rs 200,000 = Rs 100,000.

You're allowed to pay more than a quarter's share in an earlier instalment if your income is front-loaded. What you can't do is push a payment past its due date without risking a surcharge.

How to pay: generating a PSID

Advance tax is paid with a Payment Slip ID (PSID) generated in FBR's IRIS portal. If you haven't used IRIS before, our IRIS portal guide covers logging in.

1. Log in to IRIS with your registered credentials.
2. Open e-Payments and choose to create a new payment challan for Income Tax.
3. Select the tax year the instalment belongs to. For payments between July 2026 and June 2027, that is tax year 2027.
4. Choose advance tax under section 147 as the payment section or nature of payment.
5. Enter the instalment amount, check the details, and generate the PSID. Save or print it.
6. Pay the PSID through your bank's internet or mobile banking ("FBR tax payment" or "pay PSID"), at a bank ATM that offers FBR payments, or over the counter at an authorised bank branch with the printed PSID.
7. Keep the proof. Save the bank confirmation and the payment receipt (CPR) for the PSID. Check in IRIS that the payment shows against your PSID. You'll need these records when you file your return.

What happens if you pay late or pay too little

• Default surcharge. Under section 205 of the Income Tax Ordinance, 2001, a default surcharge applies to advance tax that isn't paid by its due date, from the due date until you pay, at a rate of 12% per annum or KIBOR plus 3% per annum, whichever is higher. It can also apply if you underestimated your income and your instalments fall short of the tax actually due for the year.
• More scrutiny. Repeated shortfalls or big gaps between the advance tax you paid and your final liability can draw FBR's attention. Our guide on responding to FBR notices and audits explains what happens next.

The practical rule: estimate honestly, re-check every quarter, and pay on time. Slightly overpaying does less harm than underpaying, because the excess is adjusted or refunded when you file.

Claiming advance tax in your return

When you file your return for the tax year, enter the advance tax you paid in the adjustable tax section, together with WHT deducted from you. If the total is more than your final liability, the excess can be refunded or adjusted against later liabilities. The step-by-step process is in our guide to claiming WHT credit.

Frequently asked questions

Do salaried people have to pay advance tax?

Generally not, if salary is your only income and your employer deducts tax on it. If you also have business, rental or other income not fully covered by tax deducted at source, you may be caught. Check the current threshold in section 147.

Is the third instalment due on March 15 or March 25?

Individuals pay by March 15. AOPs and companies pay by March 25 (section 147(5) and (5A) of the Income Tax Ordinance, 2001).

My income dropped this year. Do I still pay the same instalments?

No. You can revise your estimate and reduce the remaining instalments. If your income rises, increase them to avoid a shortfall.

Can I pay the whole year's advance tax at once?

Yes. You can pay more than the quarterly share early. You just can't pay after the due dates without risking default surcharge.

What if I paid more advance tax than I owe for the year?

Claim it in your return. The excess can be refunded or adjusted against future liabilities after FBR processes the return.

This is general information and tax rules change; check FBR's current notifications or a tax adviser for your own case.