Advance tax, often referred to as "pay-as-you-earn" tax, is the method of paying income tax in instalments throughout the financial year rather than as a lump sum at the year’s end. This system ensures timely collection of taxes, improves cash flow for the government, and reduces the financial burden on taxpayers. It is calculated based on projected earnings and is payable as income is received, making it particularly relevant for businesses, freelancers, and professionals with variable income sources. This approach helps taxpayers align their tax payments with their earnings schedule.