Who is required to pay advance tax?
The following businesses and individuals are required to pay advance tax in Pakistan:
- Companies
- Partnerships
- Associations of persons
- Individuals with taxable income of more than Rs. 10 million
- Individuals who are liable to pay withholding tax
How much advance tax is required to be paid?
The amount of advance tax that is required to be paid depends on the type of taxpayer and their taxable income. The following are the rates of advance tax that are currently in effect in Pakistan:
- Companies: 15% of the estimated tax liability for the year
- Partnerships and associations of persons: 10% of the estimated tax liability for the year
- Individuals with taxable income of more than Rs. 10 million: 20% of the estimated tax liability for the year
- Individuals who are liable to pay withholding tax: The amount of withholding tax that is required to be paid
When is advance tax due?
Advance tax is due on the following dates:
- September 25
- December 25
- March 25
- June 15
How to pay advance tax?
Advance tax can be paid in the following ways:
- Online through the Federal Board of Revenue (FBR) website
- By bank deposit
- By cash payment at an FBR office
What are the penalties for not paying advance tax?
The following penalties are imposed for not paying advance tax in Pakistan:
- A late payment penalty of 0.2% per day of the amount of tax that is due
- A penalty of 10% of the amount of tax that is due
- A fine of up to Rs. 100,000
Conclusion
The Advance Tax Act is an important law that helps the government of Pakistan to collect taxes in a timely manner. By understanding the requirements of the law, businesses and individuals can avoid penalties and ensure that they are in compliance with the law.
