Kenyan residents who are self-employed or have any other incomes other than the employment are required by law to declare their income tax returns to the Kenya Revenue Authority (KRA) by 30th of June every year.
This is according to the Income Tax Act, Section 52B, income tax shall be charged for each year of income upon all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya.
Other types of incomes include for example; business, farming, rental (if this was not declared under the monthly rental income regime), interest, commissions and any other incomes whose tax paid is not final.
To kick-start the process, you are required to prepare a schedule of income chargeable to tax and allowable expenses incurred wholly to generate the taxable income.
However, if you have audited accounts, you can use them to file the return for businesses.
For the purposes of this article, we offer you a step by step process for Filing of Income Tax Resident Return (ITR) for any other income other than employment
Step 1:Open your browser and go to https://itax.kra.go.ke/KRA-Portal/
Step 2: Enter your KRA PIN and password and click Continue.
Step 3: Once you are logged in, update the professional details by selecting the click down menu and then click on File Return.
Step 4: Select the tax obligation that is applicable to you, that is either Income Tax Resident individual and Income Tax Non-Resident Individual and click next.
Step 5: Download the Excel/ODS Template using the link provided.
Step 6: Under basic information, answer the questions asked e.g. your PIN, the return period, click on YES to the question-Do you have any income other than employment income? this will open other sheets relating to the declaration of the income etc. and Click ‘Next’
Step 7: From your schedule of the books of accounts or audited accounts, capture the relevant details of income and expenses in the profit and loss account sheet (P&L). Capture the gross turnover and other types of income where applicable in the relevant fields in the P&L.
If you capture your source of income as rental income, then it is mandatory to declare all of your tenants details on the basic information sheet and input the corresponding rent that they paid to you. This must be equal to the gross rent as declared in the P&L account.
Step 8: The different types of expenses have been provided in the return under major classes of expenses, operational, administrative, and financial which you are required to fill in accordingly as per your scheduled books of accounts or audited accounts. Capture only what is relevant.
If one of your operating expenses is rent expenses for premises, then it is a mandatory to declare the landlord(s) in the basic information sheet A and the respective rent which was paid to the landlord(s). Enter their PIN details
Please take note of other incomes and other expenses. Here, you will be required to describe the other incomes or expenses which could not have been described or captured in the upper part of the P&L account.
Once you capture the income or expense in this account, remember to capture zeros on the same row for the other fields relating to other sources of income.
Step 9: Move on to sheet C (balance sheet and capture the assets and liabilities as per your schedule or audited accounts. Note that the balance sheet equation must hold where Assets= Liabilities + Capital.
Step 10: Fill in the details in sheet D where applicable. If you paid instalment tax during the year, you are required to declare the payment slip details, payment registration number, date of deposit, and the amount paid. Fill the other relevant sheet where applicable.
Step 11: Go to the income computation sheet and add back any disallowable expense claimed in the profit and loss account and also deduct any allowable expenses where applicable.
Step 12: Move on to sheet T (Tax Computation) and capture details of pension contribution under SR number 11.1 if any personal relief under SR number 12.6 Confirm that all the relevant details, incomes, expenses, credits and payments have been captured and the correct tax due or refund calculated SR14. Once you have confirmed that the tax computation details are matching as per your records and the correct tax due or refund calculated, the
Step 13: Click on ‘VALIDATE’ to validate the return to generate an upload file for uploading to i-Tax once you have confirmed the tax due/refund.
Should there be a tax refund, you will be required to fill in your bank details on the basic information sheet A before you validate the file.
Step 14: Move back to the Returns Menu, select ‘File Return’, choose Tax Obligation as ‘Income Tax – Resident Individual,’ then click ‘Next’ and click on browse to upload the zip file and submit your return
Download the return receipt.
For more assistance regarding this alert, please contact;
Beatrice Kamau
Outsourced Services Manager
t +254 715 248882 | +254 733 533449
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