Every employee in Kenya is required to file returns using P9 forms. Many people find filing returns to be a time-consuming and perplexing process, especially if they are unfamiliar with the process. Every year, tax returns are due by June 30th. Late filing of tax returns results in a penalty of 5% of the tax due, or Ksh. 20,000. You can earn one of two types of returns. A P9 form is required if you are employed. If you are unemployed, however, you must file Nil Returns to avoid penalties.
What exactly is a P9 Form?
A P9 form is a tax-deduction form given to employees by their employers. It includes the basic salary, benefits, allowances, pension contributions, gross pay, tax charges, and personal relief for employees.
How to file returns using a P9 form
Below are steps to follow when filing your returns using a P9 form:
- Visit KRA itax portal( itax.kra.go.ke)
- Log in to your iTax account using your KRA pin and password
- Click on the Returns tab and click File Return
- Select your tax obligations(Income Tax-Resident Individual) then click Next
- Download the Income Tax Resident Individual Form( You will be directed on how to download and Unzip it)
- Once the excel sheet is opened, fill in the tabs, that is, basic information, employment income, details of the PAYE deducted, and tax computation(Personal Relief)
- Click on the validate button to validate the data on the Income Resident Individual Excel Sheet.
- Upload the Excel Sheet and click on the submit button
- Lastly, download the KRA eReturn Acknowledgment Receipt
It is important to note that a negative figure on your KRA Returns means that you are due for a refund from KRA. In addition, a positive figure on your returns means you owe KRA and you are supposed to pay.
How to file Nil Returns
As long as you are a Kenyan citizen above the age of 18years, you are supposed to file your annual returns. In the case where you have no source of income, you will be required to file them as nil instead of using a p9 form, which is simple. Below are the steps on how to file nil Returns:
- Go to KRA iTax Portalitax.kra.go.ke
- Enter your KRA Pin and Password
- Go to the Returns menu and select File Nil Returns
- Select your type of taxation and tax obligation and then enter your KRA Pin
- Enter your details and the return period
- Complete them and then submit
- Download the acknowledgment reciept
To summarize, it is crucial for employees to learn how to file returns using a P9 form in order to avoid penalties. It is simple and quick. Furthermore, for those who are unemployed, it is important to file annual nil returns in order to avoid hefty penalties.