ISLAMABAD: Business taxpayers whether they are individuals or associations of persons or companies are required to pay quarterly advance tax under Section 147 of the Income Tax Executive Ordinance 2001.
Individuals have to pay advance tax for the period from July 1, 2024 to September 2024 (first quarter) by September 15 under the formula (A/4-B). A stands for tax paid by him for the entire previous financial year” and B means “the amount of tax paid by that taxpayer from 1st July 2024 to 15th September 2024 in the form of withholding tax which is adjustable”.
The formula for associations of persons and companies will be AxB/C-D. Here A stands for “current quarterly turnover of the taxpayer,” B stands for “assessed tax for the previous full year, “C stands for turnover of the entire previous year of the taxpayer” and D stands for ‘the adjustable tax paid in the form of withholding tax of the taxpayer in the current quarter”.
In case of non-payment of advance tax within the prescribed period, disciplinary action and penalty will be imposed under the Income Tax Ordinance 2001.