How to File KRA NIL Returns: A Comprehensive Guide 2024

The Kenya Revenue Authority (KRA) mandates the assessment, collection, and accounting of all tax revenues in Kenya. Every person or business in Kenya with a Personal Identification Number (PIN) is required to file their tax returns annually. Filing KRA NIL returns is necessary for those who did not generate any income during the tax period. This guide provides detailed instructions on how to file NIL returns on the KRA iTax portal.

What are NIL Returns?

KRA NIL returns refer to filing an income tax return to declare to the KRA that no income was generated, and hence no taxes were paid for the respective financial year. Individuals or entities with a valid KRA PIN, but no income, must file a KRA NIL returns through the iTax portal by June 30 of the following year.

Requirements for Filing KRA NIL Returns

To file KRA NIL returns, you need the following:

• KRA PIN: A Personal Identification Number registered through the iTax portal.
• iTax Password: A password obtained during the KRA PIN registration process. If forgotten, it can be reset via the iTax portal.

Step-by-Step Guide to Filing NIL Returns

1. Access the KRA iTax Portal

There are two methods to access the iTax portal:

• Directly visit the iTax portal.
• Go to the official KRA website and click “File returns.”

2. Log in to the iTax Portal

Once on the iTax page, follow these steps to log in:

• Enter your KRA PIN or user ID under “Do you have a PIN?” and click “Continue.”
• Input your password.
• Answer the numerical security stamp question.
• Click “Log in.”

If you cannot recall your password, click “Forgot password/unlock account” to receive a password recovery link via email.

3. Select the “File NIL Returns” option to Complete the Form

After logging in:

• Click on “Returns” and select “File NIL returns” from the drop-down menu.
• Ensure “Self” is selected in the type section, and your KRA PIN is auto-filled in the Taxpayer PIN field.
• Choose the “Income Tax – Resident” option in the Tax Obligation section.
• Click “Next” to proceed.

4. Submit the Income Tax Return

On the income tax return period page:

• Click “Submit.”
• Read the pop-up message and click “OK.”

5. Download the KRA Returns Receipt

Finally:

• Click “Download Returns receipt.”
• You will receive the receipt via email. Keep the email or print the form as proof of filing your KRA returns.

Understanding the KRA NIL Returns Process

Filing for Students and the Unemployed

The procedure for filing NIL returns applies equally to students and unemployed individuals. Students who receive a Higher Education Loans Board (HELB) loan but do not generate income are considered unemployed for tax purposes. Therefore, they must file KRA NIL returns following the same steps outlined above.

Filing Zero-Income Tax Returns

Zero income means no income was earned during the tax year, placing the individual in the same category as those filing NIL returns. The process is identical for zero-income filers.

KRA Penalties for Late or Non-Filing

The Tax Procedures Act imposes penalties for late or non-filing of returns:

• Unemployed individuals and students face a penalty of 5% of the tax due or Kshs. 2,000 (whichever is higher).
• Employed individuals use their P9 forms to file returns, with penalties for businesses set at 25% of the tax due or Kshs. 10,000 (whichever is higher) plus a monthly late payment interest of 1% on unpaid tax until the full payment is made.
• Failure to file returns results in a penalty of 10% of the tax involved, up to a maximum of Kshs. 1 million.

Conclusion

Filing KRA NIL returns on the KRA iTax portal is a straightforward process that can be completed online at any time. Ensure to file before the deadline to avoid penalties. The online portal provides a convenient method to fulfil your tax obligations without visiting physical centres.

graph TD;
    A[Access iTax Portal] --> B[Log in to iTax]
    B --> C[Select File NIL Returns]
    C --> D[Complete the Form]
    D --> E[Submit the Return]
    E --> F[Download Receipt]

By following this comprehensive guide, individuals can efficiently file their NIL returns and remain compliant with KRA regulations.

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