Tax term

Advance tax

Tax paid before final assessment under applicable rules.

Money that reaches the exchequer before the year’s liability is settled is advance tax, and for a salaried employee its ordinary form is the income-tax line on the payslip. Each month’s deduction is an instalment of an annual calculation, which explains why payroll can lift the figure in a bonus month without the law changing. A salary of Rs 1,800,000 under the 2026-27 table produces Rs 72,000 for the year, an average of Rs 6,000 a month, and the twelve actual months rarely sit on that average, because employers revise the projection as allowances, arrears and appraisals arrive. What an advance becomes afterwards depends on the provision behind it: it may be adjustable against the return, or it may be final for that income. Keep payment references and the annual certificate, and confirm the treatment for the year with FBR. Paying an advance does not by itself discharge the filing duty.

Check the legal meaning in context and against the relevant tax year.