Advance Tax or ‘Pay as you earn’ tax is one which is paid advance and in installments rather than a payment at the top of the year. .
Advance tax is applicable for all those whose tax liability is quite Rs. 10, 000 during the financial year. .
The advance tax is paid to the government because it is earned, and is an attempt of the government to receive a continuing flow of tax receipts throughout the year, rather than a payment at the top of the year.