How do I account for rental income where there is mixed use of property?

Where the property has both residential and commercial tenants, the income will be treated as follows:

  • Where the gross annual residential rental income is less than Kshs. 144,000 or more than Kshs. 10 million, all rental income is combined in the annual Income Tax return.
  • Where the gross annual residential rental income is between Kshs. 144,000 and Kshs. 10 million, this part of the income is accounted for as the residential rent mentioned above, while the commercial part is accounted for through the annual Income Tax Return.

How do I claim expenses on Commercial Rental Income Tax?

Expenses being claimed under the commercial rental income portion should be apportioned in the same ratio as the income of the commercial rent pertains to the total income.

What is the monthly rental income tax?

This is a tax on gross residential rental income between 144,000 and 10,000,000 per annum and the tax is 10% on gross rent payable monthly on rent received.

If my building has commercial properties on ground floor and residential on 1st-4th floor, which rental income tax should I pay?

You may elect to file and pay tax either in the annual regime or the residential part (if the income is between 144,000 and 10,000,000) under the MRI regime while the commercial part under the annual regime.

Do irregular income earners pay taxes?

Every person pays taxes as per the tax obligations registered under their PINs

Is interest income a specified source of income?

Yes

How is KRA handling the issue of Wrong obligations added by cyber people and taxpayers believing cyber caf?s are our agents.

iTax system restricts the addition of certain obligations, which have to be approved at the stations. There are also sector based trainings targeting the cyber attendants and taxpayers.

Why is KRA sending defaulter notices to employees who have already been deducted PAYE by their employers upon filling their income tax returns?

This happens where The employer has not filed The PAYE returns in iTax, but with The employee having The evidence of PAYE deduction, The issue is sorted at their tax stations.

Most of the taxpayers are not computer literate and cannot access computers easily. How does KRA expect us to comply?

We advise such taxpayers to seek services at our iTax support centres, Huduma centres and nearest KRA office

The system is very complicated for them, what is KRA doing on this?

KRA is conducting trainings country wide and There are you tube videos to guide on The same. KRA is also working on simplifying The return filling systems.