How to File your KRA Returns with Withholding Tax

Filing your Kenya Revenue Authority (KRA) returns with withholding tax doesn't have to be a complicated process. With your smartphone, you can easily complete this task in a few simple steps. This guide will walk you through the process of filing your KRA returns with withholding tax (Source: KRA).

What You Need Before You Start

Before you start, ensure you have the following:

- Your KRA PIN: This is a unique personal identification number that every taxpayer in Kenya needs.


- Your iTax password: This is the password you use to log in to your iTax account.


- Withholding Tax Certificates: These are documents issued by the person who withheld your tax. They contain details of the income you earned and the tax that was withheld.

Read More: How to Calculate Withholding Tax on Invoice in Kenya

Step-by-Step Guide to Filing KRA Returns with Withholding Tax on Your Phone

Step 1: Access the iTax Portal


Open your phone's browser and go to the KRA iTax portal. The website is mobile-friendly, so you should have no trouble navigating it on your phone.


Step 2: Log in to Your iTax Account


Enter your KRA PIN and iTax password to log in. If you've forgotten your password, click on the 'Forgot Password/Unlock Account' link and follow the prompts to reset it.


Step 3: Navigate to the Returns Menu


Once you're logged in, click on the 'Returns' menu at the top of the page. From the drop-down menu, select 'File Returns'.


Step 4: Select the Type of Returns


You'll be directed to a new page where you'll select the type of returns you want to file. If you're an individual, select 'Income Tax - Resident Individual'.

Read More: Withholding Tax on Professional Fees in Kenya


Step 5: Fill in the Returns Form


You'll be presented with an online form to fill in your details. In the section for income details, you'll need to enter the details from your Withholding Tax Certificates. Make sure to fill in all the required fields accurately.


Step 6: Submit Your Returns


After filling in all the details, click on the 'Submit' button. You'll receive a confirmation message and an acknowledgment receipt.


Step 7: Download Your Returns Receipt


For your records, download and save your returns receipt. You can also print it out if you wish.

Conclusion

Filing your KRA returns with withholding tax doesn't have to be a stressful process. With your smartphone and a stable internet connection, you can easily file your returns from the comfort of your home or office. Remember, it's important to file your returns on time to avoid penalties. Happy filing!

(Note: This is a simplified guide and the actual process may have more detailed steps depending on your tax situation. Always consult with a tax professional if you're unsure about anything.)

FAQs

How do you treat withholding tax in accounts?


Withholding tax is treated as a current liability in your accounts. When you receive a payment from which tax has been withheld, you record the gross amount as your income and the withheld tax as a liability. When you remit the withheld tax to the tax authorities, you reduce your withholding tax liability.


What is the deadline for withholding tax?


In Kenya, the deadline for remitting withholding tax to the Kenya Revenue Authority (KRA) is the 20th day of the following month. For example, if you withheld tax in January, you should remit it to KRA by February 20th.


Is withholding tax an income or expense?


Withholding tax is neither an income nor an expense. It's a portion of your income that's withheld and paid directly to the tax authorities. It's recorded as a current liability in your accounts until it's remitted to the tax authorities.


What percentage is withholding tax in Kenya?


The percentage of withholding tax in Kenya varies depending on the nature of the payment. For example, the withholding tax rate for management and professional services is 5% for residents and 20% for non-residents. For royalties, the rate is 5% for residents and 20% for non-residents. It's always best to check with KRA or a tax professional for the current rates.


How do you calculate withholding tax on an invoice?


To calculate withholding tax on an invoice, you multiply the total amount of the invoice by the withholding tax rate. For example, if you have an invoice of Kshs. 10,000 and the withholding tax rate is 5%, the withholding tax would be Kshs. 500 (10,000 x 0.05). This amount is then withheld and remitted to the tax authorities.
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