Any individual or business with an active Personal Identification Number commonly known as KRA Pin and are permanent residents who work or do business in Kenya need to file a tax return; As per the requirements of the registered obligations under the Personal Identification Number.
With businesses, the employer files Pay as you Earn (PAYE) to declare taxes deducted from their employees. On the other hand, the employee and self-employed individuals file the returns to declare their total incomes i.e., farming income, employment income, interest, commissions among others.
What do Individuals with Employment Income need to file returns?
The first step is to get your P9 form issued by the employer.
A P9 form is a summary of the employment income received in the given year, it is issued by the employer to employees at the end of every financial year.
It’s your right to be given a P9 form. This is only applicable if your employer has been deducting pay as you earn (PAYE) from your salary.
Your employer must be remitting the returns to KRA every month. Otherwise, if they are not remitting the same, Then KRA database lacks those deductions and so, it becomes very difficult to file your returns using ITax.
As a citizen and a taxpayer, it’s your obligation to make sure that firstly, your employer is deducting the taxes every month and secondly, they are actually submitting /paying to the KRA.
How do Individuals with Employment Income only file their return?
Equipped with your P9 form, your password and your KRA Pin number, the first thing is to go to the Itax portal on Itax.kra.go.ke and log in.
Once you are logged in, on the home page dashboard, go to the returns menu and select RTI for employment income only.
Enter the return period. For example, 1st January 2021. The return period will populate.
On the same page, select Yes to the question. Do you have employment income? Then select next to go to the next page. The basic information sheet called Section A will open which shows a summary of your employment income.
The sheet on section A has two parts:
Section A Part 1: Basic Information
which consist of Taxpayer Information and Return Information
On the Taxpayer Information, you will just confirm your details whether they are correct as per your P9 form. While on the Return Information you will answer where applicable by selecting YES or NO
If you have other benefits or reliefs relating to employment income like a Car provided by your employer mortgage relief for owner occupied house you will select YES against what is applicable.
Section A Part 2: Bank Details
The banking information is provided so that whenever you have a refund the information provided can be used to facilitate the process.
On Section A Part 1 under Return Information, if you realize that you don’t have any of the listed benefits or reliefs related to employment income like Car provided by your employer mortgage relief you will select NO against what is applicable and go to the sheet section F.
The sheet on Section F contain Details of Employment Income
In this section, you will only confirm if the details of your employer’s PIN, Name, Gross salary paid, Allowances and benefits from employment other than Car and Housing net values of housing are correct as per the P9 form provided by your employer.
When every detail is correct press next which will take you to Section M
The sheet on Section M contain Details of PAYE Deducted at Source from Salary
On section M you will fill in the details of your employer PIN, Name, Taxable Salary, Amount of Tax Deducted (PAYE) which you will also confirm if the figures are tallying with your P9
On some P9 forms it refers to taxable salary as chargeable pay.
When everything is correct then go to Section T
The sheet on Section T contain Tax Computation
In this section, you will do tax computation by entering the defined or pension contribution figure and the personal relief as per your p9 form.
Once you have confirmed the tax computation details are matching with your P9 form and correct tax due or returns calculated then submit the form and download the return receipt.
If a taxpayer who opts to use this auto populated return notices a discrepancy, they should proceed to file the return using the excel IT1 return.
Also, if you get error message, go back to the returns menu and select file return then select tax obligation and click next; where you will download an excel sheet and capture the correct details as per your P9 form
If there is any tax due to pay, go to the payment menu and select payment registration. Select tax head as income tax and sub head as income tax residence. Select payment type as self-assessment and the tax period and click add.
Select mode of payment and submit then, download the payment slip and go make the payment at the partner bank of your choice amongst the one listed.
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