As the deadline for filing the 2024 Income Tax Resident Return (ITR) approaches, Kenya taxpayers face a more complex process than ever before. With significant updates introduced by the Kenya Revenue Authority (KRA) and amendments in the tax laws, including the Tax Laws Amendment Act, 2024, and the Affordable Housing Act, 2024, last-minute preparations are no longer an option. Payroll departments must also ensure that the P9 forms align with the updated format to avoid discrepancies. Here’s a detailed breakdown to help you navigate this intricate process effectively.

Key Changes for the 2024 ITR

The 2024 ITR, available in both Excel and web-based formats for employment income only, has undergone several revisions. Taxpayers are urged to download the latest ITR/ITNR Excel templates from their iTax profiles to stay compliant. These changes reflect new reliefs and deductions, making it essential to plan ahead.

Step-by-Step Filing Process

1. Basic Information: Start by entering essential details, such as confirming whether you have a mortgage or insurance policy by selecting 'Yes' where applicable. This triggers the relevant sheets for additional inputs.
2. Income Sources: Indicate if you have income beyond employment (e.g., business income) by selecting 'Yes' to unlock additional data fields.
3. Employment Income: Input your employment income details from your P9 form in sheet F, ensuring accuracy to avoid errors later.
4. Taxable Salary and PAYE: Record your taxable salary, chargeable pay, tax payable, and PAYE deducted in sheet M.
5. Mortgage Details: If applicable, include mortgage information. Note the updated maximum mortgage interest relief, increased from Kshs 300,000 to Kshs 360,000 per annum (Kshs 25,000 to Kshs 30,000 monthly), with a 2024 cap at Kshs 305,000.
6. Tax Reliefs: Claim applicable reliefs, including:

• PRMF Relief: Updated to allow 15% of contributions (max Kshs 5,000/month or Kshs 60,000/year), with a 2024 maximum of Kshs 55,000.
• AHL Relief: Introduced at 15% of contributions, capped at Kshs 9,000/month or Kshs 108,000/year, with a 2024 maximum of Kshs 81,000.
• NHIF Relief: Applicable from January to September 2024; SHIF deductions from October to November 2024 are not eligible, but December 2024 SHIF is claimable under the tax due sheet.

1. Additional Deductions: In the 'T_Tax_Computation' sheet, include:

• Pension (max Kshs 250,000 for 2024).
• PRMF for December 2024 (max Kshs 15,000).
• AHL and SHIF for December 2024 based on actual contributions.

1. Validation and Submission: Verify the tax payable, validate the return, and upload it for filing.

Important Notes

• The web-based ITR for employment income is also updated with these guidelines.
• Non-residents cannot claim AHL or PRMF reliefs, as these are resident-specific.
• Payroll teams must update P9 forms to reflect these changes to ensure seamless filing.

Why Early Preparation Matters

With the complexity of new reliefs like AHL and PRMF, alongside shifting NHIF and SHIF rules, rushing the process is risky. The KRA emphasizes downloading the latest templates and double-checking entries. Start now to avoid penalties and ensure compliance by the deadline.

Final Thoughts

Filing the 2024 ITR requires diligence and foresight. Taxpayers can confidently meet their obligations by following these steps and leveraging the updated templates. For further assistance, consult the KRA’s iTax support or visit www.kra.go.ke. Tulipe Ushuru, Tujitegemeel—let’s pay our taxes and build together!

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