Are you looking to file your KRA Tax Returns on KRA iTax Portal? Learn How To File KRA Returns Using iTax Portal In 2020.
The law is quite clear that any individual who has an active KRA PIN Number is supposed to file his or her KRA Returns for the period ended 31st December in the following year. What this simply means is that this year 2020, we are filing the KRA Tax Returns for the year 2019 and thus the KRA Returns period will be from 1st January to 31st December. You need to ensure that you file your KRA Returns before the 30th June 2020 Deadline.
In this article, I am going to share with you the step by step guide on How To File KRA Returns Using iTax Portal In 2020. By the end of this article, you will have learnt how to file your KRA Tax Returns quickly and easily so as to be able to beat the 30th June 2020 deadline. You need to take note that there are normally two types of KRA Returns for Individuals in Kenya i.e. KRA Nil Returns and KRA Employment Returns. This article will mainly focus on filing KRA Nili Returns.
This article will be ultimate beginner’s guide to KRA Returns in Kenya as I shall be highlighting on key terms and aspects relating to KRA Tax Returns that no one has ever done before. This is coupled with the fact that here at Cyber.co.ke Portal, we are the leaders in offering KRA Services to Kenyans daily. This article will cover: What Is KRA Returns, Types Of KRA Returns, Frequently Asked Questions About KRA Returns, Requirements Needed To File KRA Returns and How To File KRA Returns Using iTax Portal In 2020.
You need to take note and understand that any Kenyan with a KRA PIN is supposed to file his or her iTax Returns on or before the deadline. So, whether you are employed or unemployed, as long as you have a KRA PIN Number, filing KRA Returns is a must and failure to do so means that you will receive a penalty from Kenya Revenue Authority (KRA).
Any person who has an active KRA PIN Number and does not have any income is supposed to file his or her KRA Nil Returns between 1st January and 30th June of each year. So, you need to forget about the old notion that KRA Returns is for those who are employed, but rather any Kenyan with an active KRA PIN is supposed to be filing KRA Returns each year
What Is KRA Returns?
KRA Returns is a standard form provided by the Kenya Revenue Authority (KRA) on which a taxpayer reports taxable income with permitted deductions and exemptions and computes his or her tax liability. The KRA Returns can either be KRA Nil Returns for those who do not have a source of income and KRA Employment Returns for those who have employment as a source of income.
You file KRA Returns for the Income tax that you have generated for a period of 12 months or 1 year. Income tax is a direct tax that is imposed on income derived from Business, Employment, Rent, Dividends, Interests, Pensions among others. Individual Income Tax is charged for each year of income on all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya.
KRA Returns are filed between 1st January and 30th June of each year for the Returns of the previous year. For example, this year 2020 we are filing the KRA Tax Returns for the year 2019. And as a taxpayer in Kenya, you have between 1st January to 30th June to ensure that you have file your KRA Income Tax Returns either KRA Nil Returns or KRA Employment Returns.
Failure to file your KRA Tax Returns by the 30th June Deadline leads to automatic penalties being imposed on you by Kenya Revenue Authority (KRA) and you will have to start the process of writing KRA Waiver Letter and Apply for KRA Waiver using iTax Portal, which rarely gets Approved. The only way to avoid all this is by ensuring that you file your KRA Income Tax Returns early.
Now that we have looked at what we mean by KRA Returns above, we need to go a notch higher and look at the types of KRA Returns for Individual taxpayers in Kenya. These are the KRA Nil Returns and KRA Employment Returns. This is as discussed below.
Types Of KRA Returns
There exists two types of KRA Tax Returns for Individual taxpayers in Kenya. These are KRA Nil Returns and KRA Employment Returns. I am going to briefly highlight on each of these types of KRA Returns below.
KRA Nil Returns
The first type of KRA Returns is called the KRA Nil Returns. This type of KRA Return is filed by taxpayers who do not have any source of income either Business, Rental or Employment. KRA Nil Returns just as from its definition refers to Nil or Zero (0) tax return for taxpayers who don’t have any source of income. In most cases, when a taxpayer applies for a KRA PIN on Cyber.co.ke Portal, maybe because they need the PIN to apply for a job or even get a new DL from NTSA.
Majority of taxpayers who are supposed to file KRA Nil Returns tend to forget about KRA Returns. Some end up not filing their KRA Nil Returns before the 30th June Deadline and thus end up with the Kshs. 2,000/= imposed by KRA for late filing of returns. An this consequently leads to the taxpayer being denied a Tax Compliance Certificate due to pending KRA Nil Returns which they have not Filed on iTax Portal.
The other type of KRA Returns is what is referred to as the KRA Employment Returns. This is the type of KRA Return that is filed by taxpayers who have employment as their source of income. In other words, those taxpayers who have a source of income through their employment. This group of taxpayers are what is referred to as the employed.
The good thing thing about those who are in employment is that they never tend to forget to file the KRA Income Tax Returns unlike the group of taxpayers who are unemployed and use the notion that they don’t have a job so there is no need to file their Returns. For those in employment PAYE (Pay As You Earn) is deducted at source by the employer and remitted to KRA on a monthly basis before the 9th day of the month.
By using their P9 Forms that they get from their employers, these taxpayers are supposed to log into their KRA iTax Web Portal Accounts and download the KRA Returns Excel Form which they need to fill in with the data that is captured on their KRA P9 Forms. Once done, this KRA Returns Form is supposed to to validated and uploaded into KRA iTax Account of the taxpayer.
Having looked at the types of KRA Tax Returns above, we now need to go a notch higher and look at the Frequently asked questions about KRA Returns by taxpayers in Kenya. I shall only be highlighting the key questions that most Kenyans ask when talking about KRA Tax Returns.
Frequently Asked Questions About KRA Returns
I had previously written an in depth article on Frequently Asked Questions About KRA Returns By Taxpayers which you can check out. I shall just be highlighting the most important questions pertaining to KRA Tax Returns in Kenya.
KRA Nil Returns are filed between 1st January to 30th June of the current year. So you have a period of 6 months totalling to about 180 days to file your KRA Nil Returns. You will be filing the returns for the previous year starting from 1st January to 30th June.
What Happens When I Fail To File My KRA Nil Returns?
If you fail to file your KRA Nil Returns before the 30th June deadline, a penalty of Kshs. 2,000/= will be imposed on you as a result of late filing of the KRA Nil Returns. It is prudent to be filing your Nil Returns so as to avoid being slapped with penalties by KRA.
Is There An Extension On The KRA Nil Returns Filing Date?
There is normally NO extension of the deadline for filing KRA Nil Returns. So, the best thing you can do is to schedule a specific day and time that you will have time availability to file your KRA Nil Returns. A Return period of 6 months is quite sufficient for everyone.
KRA Employment Returns Questions
What Do I Need To Have To File Employment Returns?
To file your Employment Returns, you need to ensure that you have with you KRA PIN Number, iTax Password and P9 Form. If you have forgotten your KRA PIN Number, you can submit KRA PIN Retrieval request here at Cyber.co.ke Portal and have your KRA PIN Number and KRA PIN Certificate sent to your Email Address.
A P9 Form is a form containing total income received in a year and may include the following depending on the structuring by the employer; basic salary, allowances and benefits, gross salary, pension contribution, PAYE charged and personal relief entitlement.
What Is Tax Relief In Employment Returns?
As a resident individual you are entitled to a personal relief which is a tax incentive that reduces the amount of tax payable. The current rate of personal relief is Kshs. 16,896 per annum (i.e. Kshs 1, 408 per annum) with effect from 1st January 2018.
If you have a life, health or an education insurance policy, you are entitled to an insurance relief of 15% of the amount of premiums paid for self, spouse or child. However, it shall not exceed Kshs. 60,000 per annum.
When Am I Supposed To File My Employment Returns?
Just like those filing KRA Nil Returns, if you are in employment you need to ensure that your returns are filed between 1st January to 30th June of the current year. So you have a period of 6 months totalling to about 180 days to file your Employment Returns.
What Happens When I Fail To File My Employment Returns?
If you fail to file your Employment Returns before the 30th June deadline, a penalty of Kshs. 2,000/= will be imposed on you as a result of late filing of the KRA Employment Returns.
Now that we looked at the most frequently asked questions about KRA Returns in Kenya, we now need to look at the key requirements that are needed inorder to file KRA Tax Returns using the KRA iTax Portal in 2020.
Requirements Needed To File KRA Returns
For you to able to file your KRA Returns on iTax Portal, you need to ensure that you have with you two key requirements i.e KRA PIN Number and KRA iTax Password. We are going to look at each of these KRA Returns requirements in brief details below.
KRA PIN Number
KRA PIN Number is the most important requirement that you need to have with you. If by any chance you have forgotten or you don’t remember your KRA PIN, you can submit KRA PIN Retrieval order online here at Cyber.co.ke Portal and our team of experts will be able to assist with with PIN Retrieval request.
At the same time, if you are looking for a new KRA PIN, you can get it here in 3 minutes by submitting your KRA PIN Registration order today at Cyber.co.ke Portal. Your KRA PIN Certificate will be sent to your Email Address once the Request for PIN Registration has been done and processed from our Support team.
KRA iTax Password
The next requirement that you need to have with you is your KRA iTax Password. You will need the iTax Password to access your KRA iTax Account. If you don’t know or have forgotten your iTax Password, you can check our article on How To Reset KRA iTax Password. Once you have requested for password reset, a new password will be emailed to you and you can use it to log into your iTax Account.
Now that you have with you the main key requirements that are needed in order to file your KRA Returns on iTax, we can now shift gears and look at the step by step guide on How To File KRA Returns Using iTax Portal In 2020. Just as a reminder, this article will be focusing on the first type of KRA Returns i.e. KRA Nil Returns. For the other type of KRA Tax Returns, you can refer to our article on How To File KRA Returns Using P9 Form.
How To File KRA Returns Using iTax Portal In 2020
Step 1: Visit iTax Portal
The first step that you need to take in the process of Filing KRA Returns on iTax is to visit the KRA iTax Portal by clicking on the link provided in the above description.
Step 2: Enter Your KRA PIN Number In the PIN/User ID Section
In this step, you will need to enter your KRA PIN Number. If you have forgotten your KRA PIN, you can request for KRA PIN Retrieval here at Cyber.co.ke Portal and your KRA PIN will be sent to your email address immediately. Once you have entered your KRA PIN, click on the “Continue” botton to proceed to the next step.
Step 3: Enter KRA iTax Password and Solve Arithmetic Question (Security Stamp)
In this step, you will be required to enter your KRA iTax Password and also solve the arithmetic question (security stamp). If you have forgotten your iTax Password, you can check our article on How To Reset KRA iTax Password. A new password will be sent to your email and you can use it to login. Once you have entered your iTax Password, click on the “Login” button to access your iTax Account.
Step 4: KRA iTax Portal Account Dashboard
Once you have entered the correct iTax Password and solved the arithmetic question (security stamp) as illustrated in Step 3 above, you will be logged in successfully and be able to see and access your KRA iTax Web Portal Account Dashboard. Here upon successful login process, you are able to view a wide range of iTax Portal functionalities. Since in this article we are learning about How To File KRA Returns, we proceed to Step 5.
Step 5: Click On The KRA Returns Menu Tab Followed By File Nil KRA Returns
In this step, on the iTax Account menu list, navigate to “Returns” menu tab and click on “File Nil KRA Returns” from the drop down menu list. This is as illustrated in the screenshot below.
Step 6: Select KRA Tax Obligation As Income Tax Resident Individual
In the Nil e-Return Form, under the Tax Obligation part, select Income Tax Resident Individual since we are filing Nil KRA Returns for a Resident Individual. The other two fields i.e Type and Taxpayer are automatically pre-filled by the system.
Step 7: Fill In The Income Tax Resident Individual Nil e-Return Form (KRA Returns Form)
In this step, on the KRA Nil e-Return Form, you need to select the date for the Return Period From part. Since we are in 2020, we are filing KRA Nil Returns for 2019. So the Return Period From date will be 01/01/2019 and the Return Period To date will be automatically pre-filled by the system to 31/12/2019.
Once you have entered the returns dates 01/01/2019 – 31/12/2019, click on the “Submit” button to submit the KRA Nil Return to Kenya Revenue Authority (KRA). A pop up notification from itax.kra.go.ke will appear as shown below:
The popup message simply states: “Dear taxpayer, filing of Nil Returns is only applicable in cases where you have no transactions to declare for the period. Are you sure you want file Nil Return? Since that is what we are filing here, click on the “Yes” button.
In this last step, you will need to download the Nil KRA Returns Acknowledgement Receipt that has been generated by the iTax system successfully. This is a final confirming that your KRA Nil Return has been successfully submitted to Kenya Revenue Authority (KRA). An Acknowledgement Number will also be generated for that KRA Nil Return that we have just filed.
Below is the KRA Returns Acknowledgement Receipt that is a final confirmation that we have successfully file the KRA Tax Returns on KRA iTax Portal. Take note that we were filing KRA Nil Returns in this article as one of the two types of KRA Tax Returns in Kenya for Individual taxpayers.
The above KRA Tax Returns Acknowledgement Receipt is the final confirmation that the return for the period ending 31st December has been successfully filed on iTax. The above steps form the basis of the process of How To File KRA Returns using iTax in 2020. One thing that you need to ensure that you have with you is both the KRA PIN Number and KRA iTax Password as this two play an important role in the process of Filing KRA Returns on iTax.
Matthews Ohotto is an OnlineTutorials Blogger with vast experience in Researching, Writing and Publishing the most comprehensive: Latest iTax Tutorials, Latest eTIMS Tutorials, Latest KRA Updates, Popular Blog Posts, Latest Online Tutorials and Latest Sponsored Posts in Kenya at CYBER.CO.KE on a day to day basis, keeping you informed and engaged with insightful content. He is a holder of Bachelor of Business Information Technology (BBIT) Degree from Jomo Kenyatta University of Agriculture and Technology (JKUAT) with key interests in Digital Business Innovation and Online Entrepreneurship.
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