Advance Tax under Section 147 of the Income Tax Ordinance, 2001 is a tax system used by the Federal Board of Revenue (FBR) in Pakistan, where certain taxpayers are required to pay their income tax in installments before the end of the tax year. This system ensures that tax is collected progressively throughout the year, instead of at the year-end, improving cash flow for the government. Key Points of Advance Tax under Section 147 Who is Liable to Pay Advance Tax? Advance tax under Section 147 is applicable to: Companies Association of Persons (AOPs) Individuals with significant income not subject to withholding tax (e.g., business income, rental income) Taxpayers with predictable and continuous income are often required to pay advance tax, especially when a large part of their income is not already taxed at source. Calculation of Advance Tax : Advance tax is based on the estimated income of the taxpayer for the ongoing tax year. It is calculated as follows: For individuals and AOPs