This is a guide on how to file annual income tax for employed people. It is mandatory for Kenyans within the tax bracket to file returns. This is for anyone with a personal identification number simply known as KRA Pin. Those without a pin can apply for the KRA pin from the iTax portal.
What many people do not know is that whenever you have a pin, you are supposed to file returns. If you fail to file your return by the stipulated time, the taxman will penalize you. At the moment, the annual income tax penalty is Kshs 2,000. Note that the taxman can review it at any moment. The disadvantage of not filing returns is that you cannot be given a compliance certificate. Again you will be going against the stipulated laws for not filing your returns.
Annual income tax is filed starting the first of January and the deadline is 30th of June each year. Many people wait for the last month which is not a good idea because the iTax Portal usually gets clogged. You will be very lucky to find the system working normally during the last days.
Once you get issued with a pin, you become liable to filing returns depending on the obligation on your tax pin. Filing nil or zero return is for those who have no income for that specific year. Those who are employed should file returns according to their P9 forms. Business people should declare their annual earnings and expenses. Out of the net profit, a certain percentage is calculated as the tax payable.
What you Require to File for Income Tax Individual
- Your KRA pin and password
- Your P9 form
Procedure for Filling Annual Income Tax for Employed People
- Log into the iTax portal. You will require your KRA pin and password. If you cannot remember your password, you can reset it to get a new one.
- Once you successfully log in, the iTax portal opens.
- Locate the Returns menu and hover the mouse pointer over it.
- Move the pointer down and click on file return.
- In the next window, select the obligation which should be Income Tax Individual for this case and click next.
- Download the Income Tax Excel form by clicking on the provided link.
How to Fill the Excel Income Tax Individual Form
- Go to your computer downloads and locate the zipped folder for the Income Tax Individual. Double click on it to open.
- Double click on the Excel file to open it. Click on where it is written ‘protected view’ and then click on ‘edit anyway’. Click on enable content to enable the Macros. The return form opens.
- Enter your PIN and select “original” as the type of return. The return period is the beginning of the previous year and ‘Return Period to’ is the end of the same. All this is done on worksheet ‘A’ also named ‘Basic Info’.
- Click on worksheet ‘F’ namely ‘Employment Income’. Enter the pin and name of the employer as in your P9 form. Indicate your gross pay. If the other columns are not applicable, leave them as zero.
- Proceed to Sheet M (Details of Paye Deducted). Input the name and pin of the employer, taxable salary, tax payable on taxable salary, and amount of tax deducted.
- Head straight to work sheet T – tax computation. Enter the pension contribution and personal relief. All these are indicated in your P9 form.
- Check the tax due row at the bottom. In most cases it should read zero. You should be worried if you see a positive figure. This is because it means you have to pay the indicated amount. A negative figure means you have been overtaxed and you are liable for a refund.
- If all is well, click on validate. If there is a negative figure which translates to a refund, you will be required to enter your bank details. This is done on ‘Worksheet A’ Section A part 2.
How to Upload the Annual Income Tax Individual Return
- Minimize the Excel income tax individual form and go to iTax Portal. If you have been logged out log in again.
- Click on the file returns menu and select the file returns option.
- Select Income Tax Resident Individual as the tax obligation.
- In the next dialogue, select the year which should be the beginning of the previous year. This should be the 1st of January unless you applied for your pin in the middle of the year. In such a case, just look at your KRA Pin Certificate to see the date to input. The last day of the year which is 31st December appears automatically. The dates appear automatically if you have filed previous returns.
- To upload the form click on browse. Locate and click on the zip file from the documents folder. It is named according to the date and time you have filed the return and pin and obligation type.
- Agree on the terms and conditions by ticking the checkbox and click on submit. You will get a message do you want to upload the form? Click okay to proceed.
- Your return will be submitted and a link will become available for you to download the summarized acknowledgment form. You can print but all in all it will sent to your email.
How to View Filled Returns
If you want to view the returns you have filed, go to return menu, then click on view filed returns. You can click on consult without selecting the specific return you want. This option lets you view all the returns you have filed and the dates of filing.
How to Check Your Return Fines
Go to the Payments Tab and click on payment registration. Some of your KRA pin details will be displayed, click on next. Select the tax head (income tax), tax subhead (income tax resident individual), and payment type select self-assessment tax. If you have some pending liabilities, they will be displayed, if none you will get a message for no liability for the selected obligation.
How to Generate a Payment Slip
In case there is a liability you would like to pay for, you are supposed to generate a payment slip. Click on the radial button against the return. Down, locate a button written ‘add’ and click on it. Below select the mode of payment and submit. A payment slip will be generated for you to download. You can make your payment through Mpesa or go to any bank and make your payment.
