Filling the ITR Excel sheets for the KRA has seen many pay tidy sums to have others do the job for them while many have given up altogether due to the complexities involved.
However, KRA has gone a step further this year to make filing tax returns easier for Kenyans such that with all the particulars needed, one could be done in less than 30 minutes. All they need to do is fill in the required information on the iTax portal.
To make Kenyans file their tax returns early and avoid the last-minute rush, KRA has been carrying out campaigns to enlighten citizens as well as encourage all to do what is required of them through the iTax portal.
With the June 30th deadline for filing tax returns fast approaching, Kenyans will have no excuse why they could not have done it in time.
For employment income, here are the things you need to know before filing your income tax returns for 2024.
An internet-enabled device. This could be a smartphone, a laptop, or a computer. If none of the above is available, you can always use a cyber café.
You need a P9 form from your employer. This form indicates all the deductions and it is always up to date for the period you are filing your tax returns for.
You definitely cannot file your tax returns without a KRA PIN so you need to have one which can only be accessed using an iTax password.
Filing tax returns has been there since 1992 with KRA saying that Kulipa Ushuru ni Kujitegemea. By filing your tax returns, it also helps you ascertain that what was deducted from your income as tax by your employer is the correct amount.
Having confirmed that, you are set to file your returns. The P9 form contains the total income received in a year and may include the following depending on the structuring by the employer; basic salary, allowances and benefits, gross salary, pension contribution, PAYE charged and personal relief entitlement.
Here is how KRA explains the P9 information:
Gross pay is the sum of your basic pay and any other taxable allowances and benefits received as a result of employment.Pension contributions, mortgage interest, and savings in a homeownership savings plan (HOSP) if any are deductible contributions. They are therefore deducted from your gross pay before arriving at the taxable income. These amounts should be captured in their respective sections on the online return form.
Failure to capture these correctly on the form will result in tax payable at the end of the filing process.
The deductible contributions are however subject to various conditions. Mortgage interest or owner-occupied interest on an amount borrowed for either purchase of premises or improvement of premises you occupy for residential purposes is deductible up to a maximum of Ksh 25,000 per month (Ksh 300,000 per annum).
Savings in a Home Ownership Saving Plan from an approved institution is deductible up to a maximum of Ksh 4,000 per month (Ksh 48,000 per year)
Contributions towards a defined contribution fund such as a registered pension fund, individual retirement fund, or the National Social Security Fund (NSSF) is allowable up to a maximum of Ksh 20,000 per month (Ksh 240,000 per annum). The deductible amount is however limited to the lesser of:
- 30% of your pensionable (basic) income
- Actual contribution
- Ksh 240,000 (i.e. equivalent to Ksh 20,000 per month)
As a resident individual, you are entitled to a personal relief which is a tax incentive that reduces the amount of tax payable. The current rate of personal relief is Ksh 16,896 per annum (i.e. Ksh 1, 408 per month) with effect from 1st January 2018.
If you have a life, health, or education insurance policy, you are entitled to an insurance relief of 15% of the amount of premiums paid for self, spouse, or child. However, it shall not exceed Ksh 60,000 per annum.
With these few tax filing concepts, you are now ready to file your returns.
It is important to start the filing process early so that in case you face any challenges that require KRA’s intervention, you have ample time to get it sorted out prior to the deadline.