The document outlines various tax incentives for individuals in Kenya, including a personal relief amount of 28,800 Kenyan shillings per year for residents. It provides tax relief of up to 60,000 shillings per year for life, education, and health insurance premiums. Employee contributions to pension funds are also tax deductible up to 20,000 shillings per month. Mortgage interest of up to 300,000 shillings per year and gratuity payments of up to 240,000 shillings per year into pension schemes are exempt. Retirement amounts of up to 600,000 shillings are also tax free. Failure to file returns or pay taxes on time results in penalties and interest charges.

1. TAX INCENTIVES FOR INDIVIDUALS

2. Personal relief for Resident Individuals :– Sh. 28,800 per annum
Relief on premiums paid for Life, Education and Health policy for Resident Individuals:-
15% of premiums paid subject to a maximum of Shs. 60,000/= per annum (w.e.f. 1st
January, 2007).
Note:
Life or education policies – whose term commences on or after 1st January, 2003.
Health policy whose term commences on or after 1st January,
2007.
TAX INCENTIVES FOR INDIVIDUALS

3. Employees contribution to registered defined benefit fund or defined contribution
fund is tax-deductible – maximum Kshs. 20,000/= per month (w.ef. 1st January, 2006)
Relief/deduction of interest paid on Mortgage for owner-occupied properties, subject
to a maximum of Kshs. 300,000/- per year.
TAX INCENTIVES FOR INDIVIDUALS cont'...

4. Where employer pays gratuity into a registered pension scheme instead of paying the
gratuity to the employee, the tax exempt amount is Ksh. 240,000/= per annum w.e.f.
1st January, 2011.
Tax-free amount on retirement is Kshs. 600,000 w.e.f. 1st January, 2010.
Monthly or lump sum pension granted to a person who is sixty five (65) years or more
is exempt from tax w.e.f. 13th June, 2008
TAX INCENTIVES FOR INDIVIDUALS cont'...

5. Taxpayers should be compliant to avoid punitive penalties and interest imposed by KRA.
Failure to file individual return before the due date- 2,000. Late payment attracts a penalty
of 5% of the tax due and interest of 1% per month
Failure to file PAYE return- 10,000 or 25% of the tax due, whichever is higher. Late
payment attracts a penalty of 5% of the tax due and interest of 1% per month
PENALTIES AND INTEREST

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