Tax payments in installments

Commissioner of inland revenue has powers to allow payment of tax liability in installments instead of paying it at once.

The tax is payable, including u/s 113 on the due date for furnishing the return of income for that year.

When commissioner issues order of assessment or order of amended assessment. Commissioner issues notice of demand along with complete assessment. It orders to pay tax within a period of 30 days from the date of service of notice of demand.

Provided that the due date for payment of tax payable under sub- section (7) of section 147 shall be the date specified in sub-section (5) or sub-section (5A) or first proviso to sub-section (5B) of section 147.

Upon application from the taxpayer for tax payments in installments in written, commissioner may allow to pay the tax in installments under sub-section (2). The period of payment of tax in installments may vary according to the circumstances of the relevant case. 

If taxpayer is allowed to pay due taxes in installments then if any default is found in payment of taxes then it must be kept in your mind that total tax due at that time will become due immediately. Such balance amount then will have to pay in lump sum instead of installments.

Taxpayer must also kept in mind that in case of grant of approval to pay due taxes in installemnts the commissioner inland revenue will not prevent himself from charging of default surcharge. Section 205 of the income tax ordinance 2001 relates to such default surcharge. Application of default surcharge starts from the due date of tax under sub-section (2).

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