Here is how to file your Income Tax Return for other types of income apart from employment such as business, farming, rental ( if the rent was not declared among the monthly rental income regime) , interest whose withholding tax is not final, commissions and other incomes whose tax paid or deducted at source is not final.
The taxpayer is required to have prepared a scheduled of income chargeable to tax and allowable expenses incurred wholly to generate this taxable income.
Those with audited accounts can use them to file the return.
For individuals it is not mandatory to have your accounts or books audited by an external auditor.
1.Search on Google for Itax- KRA which is the ITax online service area. The direct link to the website or portal is https://itax.kra.go.ke/KRA-Portal/
2.Log in using your KRA pin. Then Continue, Enter your password,
In case you do not remember your password click on forgot password or Unlock account then do the arithmetic then submit and your password will be emailed to you on your registered email address.
Using the new sent password you can then reset and key in your new desired strong password that you can easily remember.
3. Once you log in update your professional details then proceed to the Returns Menu at the top and select File Return from the drop down.
4. Select the Tax Obligation: Income Tax Resident or Income Tax non resident individual depending on you then click next.
5. Click to download the Income Tax Resident Individual Return form in Excel using the provided link.
6. Proceed to section A and enter your KRA pin, type of return, return period from and return period to and select Yes to the question do you have any income other than your employment income.
The return will open other relevant sections relating to the declaration of the income.
7. From your schedule of the books of accounts or audited accounts you will capture the relevant details of income and expenses in the profit and expenses at Section B.
Capture the gross turnover and other types of income where applicable in the relevant fields in the profits and loss account sheet at Section B .
If you capture your source of income as rental income then it is a must to declare all your tenants details on the basic information sheet and the corresponding rent they paid to you must be equal to the gross rent as declared in the profits and loss account.
The different types of expenses have been provided in the return under major classes of expenses, operational, administrative and financial which you can fill accordingly as per your schedule, books of account or audited accounts.
Only capture what is relevant and leave the other fields blank and also capture under the correct column for the specified source of income.
If one of your operating expenses is rent expenses for premises then it is a must to declare the landlord or the landlords in the basic information sheet A and respective rent which was paid to the landlord or landlords.(Pin of the landlord is not mandatory).
8.Please note the section at the bottom of the sheet (Part I) for other income and other expenses.
Here you will be required to describe the other income or expense which could not have been described and captured in the upper part of the profit and loss account.
Once you capture income or expense in this section (Part B: II) remember to capture zeros on the same row for the other fields relating to other sources of income.
9. Proceed to section C: Balance Sheet and capture the assets and liability as per your schedule or audited accounts.
Please remember the balance sheet equation holds where Assets equals = Liabilities + Capital
10. Fill in the details in Section D and E where applicable.
11.If you paid installment tax during the year you will declare the payment slip details, payment registration number, registration number, date of deposit and amount at (Section N – Details of Installment Tax Paid)
12. Fill the other relevant sheets where applicable, go to Section T: Income Computation and add back any disallowed expenses claimed in the profits and loss account and also deduct any allowable expenses where applicable.
13. Go to Section T: Tax Computation and capture the details of Pension contribution under SR. Number 11.1 any personal relief under SR number 12.6. Confirm that all relevant details of income, expenses, credits and payments have been captured and the correct tax due or refund calculated under SR number 14.
Once you have confirmed the tax computation details are matching as per your records and the correct tax due or refund calculated then validate and generate the upload file.
In case of a tax refund you will be required to fill the bank details on the basic information Section A part 2: Bank Details before you validate the file.
Proceed to Income Tax Residential Form and enter the Return Period from and return period to if filing for the first time otherwise the form will pre populate.
14. Upload from by choosing the zip or upload file which was generated and saved under you computer documents folder. Agree to the terms and conditions and submit.
15. Download the Acknowledgement Returns Receipt.
If there is any tax due to pay proceed to proceed to Payments Menu, Payments registration and proceed as shown on tutorial below.
Here is a tutorial on how to file income tax return for both employment and side business.