When are a company's quarterly advance tax instalments due, how are they calculated, and does super tax go into them?

A company does not wait for its return to pay the year’s tax. Section 147 of the Income Tax Ordinance, 2001 makes it pay four instalments during the year, sized by its turnover in each quarter. This page uses the Ordinance as amended to 30 June 2026, so it describes instalments for tax year 2027 (quarters from July 2026 to June 2027 for a company on the normal tax year).

Who has to pay?

Section 147(1) applies to every taxpayer whose income was charged to tax for the latest tax year, apart from income listed in clauses (b) to (d), such as dividends and other income charged separately, salary taxed at source, and income that has suffered a final tax without a tax credit. Section 147(6A) goes further for a company or association of persons: advance tax is payable even where there is no last assessed income or declared turnover, in which case the company estimates it from its quarterly turnover.

What are the due dates?

Section 147(5A) sets the dates for a company or association of persons:

Quarter	Due on or before
September quarter (July to September)	25 September
December quarter (October to December)	25 December
March quarter (January to March)	25 March
June quarter (April to June)	15 June

Note that the June instalment is due on the 15th, before the quarter ends.

How is each instalment calculated?

Section 147(4) gives the formula for a company: (A x B/C) - D, where:

• A is the company’s turnover for the quarter;
• B is the tax assessed to the company for the latest tax year;
• C is the company’s turnover for the latest tax year; and
• D is the tax paid in the quarter for which a credit is allowed under section 168, that is tax deducted or collected at source from the company in that quarter.

B/C is last year’s effective tax as a share of turnover, applied to this quarter’s sales.

If the company does not provide its turnover, or the quarter’s turnover is not known, the proviso to A takes it as one-fourth of one hundred and twenty percent of the turnover of the latest tax year for which a return was filed.

Does super tax go into the instalments?

Yes, in three places:

1. The Explanation to section 147(4) says “tax assessed” (B) includes tax under sections 4C, 113 and 113C.
2. Section 147(4AA) says tax liability under sections 4C, 113 and 113C shall also be taken into account in working out advance tax.
3. Section 4C(5A) says the provisions of section 147 apply to tax payable under section 4C.

So B includes super tax, minimum tax and Alternative Corporate Tax (the higher of corporate tax or ACT under section 113C) for the latest year.

Worked example (illustrative figures)

Sialkot Surgical Exports (Pvt) Ltd has these figures for its latest tax year, tax year 2026:

• Turnover (C): Rs. 2,000,000,000
• Tax assessed (B): Rs. 60,000,000, of which Rs. 18,000,000 was super tax

For the September 2026 quarter, turnover (A) is Rs. 550,000,000 and tax withheld from the company in the quarter (D) is Rs. 4,000,000.

1. A x B/C = Rs. 550,000,000 x 60,000,000 / 2,000,000,000 = Rs. 16,500,000.
2. Less D: Rs. 16,500,000 - Rs. 4,000,000 = Rs. 12,500,000, due by 25 September 2026.
3. Without the super tax in B, the figure would have been Rs. 550,000,000 x 42,000,000 / 2,000,000,000 - Rs. 4,000,000 = Rs. 7,550,000. Leaving super tax out would under-pay by Rs. 4,950,000.
4. If the September turnover had not been provided: A = 1/4 x 120% x Rs. 2,000,000,000 = Rs. 600,000,000, and A x B/C = Rs. 18,000,000 before deducting D.
5. Late payment. If the Rs. 12,500,000 is paid 30 days late, default surcharge under section 205(1A) at 12 per cent per annum is Rs. 12,500,000 x 12% x 30/365 = about Rs. 123,288. (The section states an annual rate; the 365-day count here is for illustration.)

What if …?

What if this year’s tax will be higher than the formula gives? Section 147(4A) requires the company, before the second instalment is due, to estimate the year’s tax. If it is likely to exceed what sub-section (4) produces, the company furnishes the estimate to the Commissioner by the second quarter’s due date, pays fifty per cent of it (less amounts already paid) by that date, and pays the remaining fifty per cent in two equal instalments by the third and fourth quarter dates.

What if this year’s tax will be lower? Section 147(6) lets the company furnish a lower estimate before the last instalment is due and pay the reduced amount on the remaining dates. Section 147(6B) requires the estimate to show turnover for completed and remaining quarters, evidence of expenses, tax payments and credits, and a computation of estimated taxable income. The Commissioner may reject an unsupported estimate after a hearing, and the formula then applies.

What if the company under-estimates? Section 205(1B) charges default surcharge at 12 per cent per annum where tax under sub-section (4A) or (6) is not paid, or the tax paid is less than ninety per cent of the tax chargeable for the year. It runs on the shortfall below ninety per cent, from 1 April of that year to the date of assessment or 30 June of the next financial year, whichever is earlier.

Common mistakes

• Using the 15th for every quarter. Those are the individual dates in section 147(5). A company’s September, December and March dates are the 25th.
• Leaving super tax, minimum tax or ACT out of B. The Explanation to section 147(4) includes them.
• Deducting every tax paid in the quarter as D. D is tax for which a credit is allowed under section 168; tax that is a final tax without credit is not part of it.
• Treating advance tax as optional because last year was a loss. Section 147(6A) still requires a company to estimate and pay on quarterly turnover.

What to check in the official text

Read section 147 in full, section 4C(5A), and sub-sections (1A) and (1B) of section 205 in the official PDF of the Ordinance. Section 147(7A) allows the Board to prescribe how the estimate is furnished through Iris or another automated system; those procedures and portal steps are not part of this corpus. Banking companies have their own instalment rules and are not covered on this page.