Filing an annual return for Individual on I-Tax (KRA)

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Did you know that filling a KRA return is so easy. This however applies when you know how to do it.

Unlike in the previous years where failure to file a return only attracted a penalty of Kshs 1,000, now things are more tough. Failure to submit a return to KRA attracts a penalty of Kshs 20,000.

Given the current economic situation in Kenya, I think parting with Kshs 20,000 is something to be avoided at all costs. If you are new to the concept of submitting returns online, don’t worry I got your back.

In this tutorial, we will look at how to file an annual individual return for an employed person i.e.(a person with employment income only)

Before we proceed, let’s make sure your KRA PIN is updated in the itax system, and you have the login details, which are PIN and password. If not, then to update your PIN on I-Tax, see our tutorial on how to update your PIN on I-tax. If however your PIN is updated but you don’t have your password, see our tutorial on recovering your lost password on I-tax.

Next obtain your P9 form from your employer which shows your PAYE deductions for the year (If you cannot get your P9 form in time from your employer, see how to prepare your own P9 form).

Now that we are set with everything, let’s begin.

  1. Login on i-tax using your PIN and password. (you can access i-tax via any browser including Mozilla, Chrome, Edge, Opera mini etc. Just open your browser and search i-tax). You can also use this link https://itax.kra.go.ke/KRA-Portal/ to access itax. Once you login the screen shown below appears.
  2. Hover over the returns icon and select the first option which is “file return.” The screen below appears.
  3. Under the 3rd option i.e. tax obligation, select income tax- resident individual. This applies for people who are residents(citizens) of Kenya. However if you are not a resident (citizen) then select income tax non-resident individual.
  4. Once you have selected your option, click next. The following page appears
  5. Scroll down to step 5 in the i-tax page.
  6. This is the point where you select the form to download form option. Note that there are two forms here, excel and ODS.
  7. If you are using excel, then choose the excel option. But if you are using ODS then select the ODS option. “Click here” to download your form. You can either choose to save the file or open with. It is advisable to save file in order to be able to access it later, if you need to.
  8. Once this is done, go to where the file is located and open it.
  9. Given that this is a macro file, it may not open if your macros are not enabled in excel. See our tutorial on enabling macros in excel.

 

 

Now that everything is ready, let’s look at how to fill in the details.

The form has various sheets which include:

  • Errors
  • A_Basic_info
  • F_Employment_income
  • J_Computation_of_Mortgage
  • M_Details_of_PAYE_Deducted
  • Q_IT_Payment_Credits
  • T_Tax_Computation

In this tutorial we will look at basic info, employment income, PAYE deducted and tax computation as these are the most common. But if you need help on the other items, you can like our Facebook/Twitter page and post your question to us. We will guide you through.

Errors

This particular sheet gives the errors found in your form (if any) when you try validating the form

Basic Information

This is where you fill in your basic information as follows:

  1. Personal Identification Number– here type in your KRA PIN
  2. Type of return– select original, unless you are trying to change a return that you had already filled earlier on, in which case you select amended.
  3. Return period from– type in 01/01/201XX where XX stands for the year you are declaring.
  4. Return period to – type in 31/12/20XX e.g. 31/12/2017.
  5. Under Section A part 1 – return information- since we are filing for employment income only, select all options as “NO”
  6. Section A Part 2 – bank details. This is not a mandatory section, unless your tax value comes to a negative (claim). In such a case you need to declare your bank details so that KRA can process your refunds. It is advisable however to avoid this case as this may lead to extra scrutiny from KRA when processing your refund.
  7. Section A parts 3-6 are not mandatory sections. Just leave these sections blank

Employment Income

This is as follows:

  1. Details of employment income (only fill in the self part)
  2. Here the details needed are PIN of employer, name of employer, your gross pay and allowances (if any).
  3. Fill in the details accordingly in step 2 above, Other than gross pay, input 0 in the other sections- i.e. From allowances to pension

PAYE Deducted

Here you fill in the PAYE Details as provided in your P9. If you don’t have a P9, see how to prepare your own P9 form.

Steps

  1. Click on the cell under PIN of employer, and input your employer’s PIN. You can also choose from the drop-down arrow.
  2. Again under employer name- type your employer’s name
  3. Then under the taxable pay, type in the taxable pay. Note that taxable pay is usually computed as follows:

Taxable pay=Gross pay – allowable deductions

The allowable deductions include pension/NSSF subject to a maximum of 240,000 per year or
20,000 per month.

  1. Next fill in the tax payable on taxable pay, which is usually gross tax before relief.
  2. Next input the figure for PAYE deducted, which should be as per your P9 form. The PAYE is usually gross tax in step 4 above less the personal relief. This ,means that once you input your PAYE figure, the balances under amount of tax payable or refundable C=(A-B) should be equal to or less than your personal relief.

 

NB: The personal relief in 2016 was 13,944 per year, 15,360 in 2017 and 16,896 in 2018.

So when doing the return for 2017 you should use 15,360

 

After completing this section, go to tax computation sheet.

 

Tax Computation

  1. Under tax computation go to 11.1 Defined/pension contribution – here input your pension contribution figure, again you can get this from your P9 form. For most people, this is usually NSSF which is 200 per month which translates to 2,400 per year.

 As mentioned in step 3 of PAYE deducted, this figure (pension allowable) is subject    
           to a maximum of 240,000 per year or 20,000 per month.

  1. Next go to 12.6 personal relief- type in 15,360 and scroll to the end under 14 tax due/refund due
  2. Under this section, the figure should be zero. This may however not be the case due to round off errors. If this is the case, then you have three options:
  • Either pay the tax due if the amount comes to a positive (tax payable)
  • Fill your bank details under basic information if the figure comes to a negative (refund due)
  • You can also correct the round off errors by adjusting the gross pay and taxable pay under employment income and details of PAYE deducted in the previous sheets. If you want to use this option, then see correct round off errors when filing annual return

Now that we have filled all the relevant columns, click on validate just below the tax payable/due section. If everything is okay then you should see a prompt indicating that sheet are ready to be uploaded, generate upload file. Click yes and wait.

Once the upload file is generated, you will see a prompt indicating where the generated file has been saved. By default the generated file is saved in the following location for windows: C:\Users\hp\Documents. The location may be different for other systems.

If there were errors when filling your details, e.g. failure to input your gross pay, then validation won’t work. Instead a screen pops up indicating that upload file could not be generated due to some errors.

If this happens just go to the errors sheet and correct the errors.

 

Uploading generated file to I-tax

Now that everything is set, go back to your I-tax account in the KRA portal.

Scroll down to step 5 in the portal, where had gone to when you downloaded the return form. If you are logged out of the system due to time expiry, just login again

You can refer to the start of this tutorial in regards to logging in.

  1. Go to Income Tax – Resident Individual Form
  2. Under return type choose original (choose amended if you are correcting a return you had filed earlier)
  3. Enter the return period from and to as follows: 01/01/20XX to 31/12/20XX. Where XX is the year you are filing for.
  4. Next click on browse to upload the generated upload file. Locate the generated upload file and attach it.
  5. Check the “I Agree to the Terms and Conditions ”
  6. After that just click on submit and wait.
  7. If everything is okay, you will see “Download returns receipt” o the page that pops up. Click on this to download the return
  8. If you don’t download the form, don’t worry the return acknowledgement is sent to your email and you can access it from there.

Now filing returns will no longer be a hassle for you.

Remember that you can also complete this process without having to download the KRA form. For more information see : how to fill individual return on itax without downloading form.

If you have any queries comments or compliments, please write to us via info.azwconsulting@azwgroup.co.ke

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