A notice under Section 147 asks you to pay advance tax on income FBR estimates you’ll earn during the current tax year — it’s a forward-looking demand, not a correction of a past return. If you’ve received one, understanding how advance tax works helps you respond correctly instead of either overpaying or ignoring a real obligation.
What Advance Tax Under Section 147 Is
Certain taxpayers — mainly those with business or professional income above a threshold — are required to pay tax in quarterly installments during the year, based on an estimate of that year’s income, rather than paying the full liability only when filing the annual return. Section 147 governs how this estimate and installment schedule work.
Who Typically Gets This Notice
Companies, AOPs, and individuals with business income above the specified threshold in the immediately preceding tax year are generally required to pay advance tax. FBR may also issue a notice specifically intimating the estimated amount due for a quarter if you haven’t proactively computed and paid it.
How the Estimate Is Calculated
The advance tax installment is typically based on your tax liability for the latest assessed tax year, adjusted proportionally for the quarter, unless you file your own estimate showing your actual expected income is lower — in which case you can pay based on your own calculation instead of FBR’s default formula.
What to Do When You Receive This Notice
Verify the estimated amount against your own income projection for the year. If FBR’s estimate is roughly accurate, pay the quarterly installment by the due date. If you genuinely expect materially lower income this year, you can file a revised estimate with justification rather than paying based on last year’s higher figure.
What Happens If You Don’t Pay
Failure to pay advance tax installments on time results in default surcharge accruing on the unpaid amount, calculated from the due date until payment. This is separate from your final annual tax liability — advance tax paid gets credited against that final liability when you file your return.
For other FBR notices, see our 182(2) notice guide. To check your account and pay online, use the FBR IRIS portal directly.
