Did you know that every KRA PIN holder is legally required to file a tax return even without an income? Yes, KRA expects you to file a Nil return at the end of each tax period, even with no transactions to show. It doesn’t matter whether you are a student, unemployed, closed your business, or didn’t earn any income in the given period.
Failure to file a tax return attracts a penalty. To avoid these penalties, make sure you file your returns before the end of the tax period. This is usually on or before the 30th of June of the year after the tax period. For instance, the deadline for filing tax returns for the 2025 year is on or before 30th June, 2026.
For monthly returns, it’s on or before the 20th day of the month after the tax period. We prepared this guide to show you how to file Nil returns on iTax, KRA’s online service area. Let’s get into it.
What is a Nil Return?
A Nil return is a tax declaration by a PIN-holder to KRA letting them know they didn’t earn any income in a particular tax period. We pay taxes to KRA from our income, such as business profits, salaries and remunerations, and rent income. If you didn’t earn any income for various reasons, you’re eligible to file a Nil return.
You may lack an income for a certain tax period for various reasons. Maybe you got laid off, you closed your business, or you lacked tenants for your rental property. Whatever the case, you need to file your Nil return to avoid penalties.
Who Should File a Nil Return?
Here are examples of KRA PIN holders eligible to file a Nil return:
- Students
- Recent graduates who are yet to secure employment
- Individuals who are unemployed and who don’t conduct any business
- Business owners whose businesses were inactive during the tax period
- Individuals who left employment or were fired from their jobs
- Landlords and landladies who didn’t collect rent due to vacancies or other reasons
What Do I Need to File a Nil Return?
Filing Nil returns is straightforward. You’ll need the following requirements:
- A browser-supported device like a computer, tablet, or smartphone
- Internet connection
- KRA PIN and password
With those, you are all set to file your Nil return on iTax.
Note: If you have forgotten your iTax login password, click on the Forgot Password button. You’ll get a system-generated prompt to change your password via email. Just make sure you have access to the email you used to register for your KRA PIN.
How to File Returns on iTax: Step-by-Step Process
Follow these steps to file your Nil returns on iTax:
- Open your web browser and go to https://itax.kra.go.ke/KRA-Portal/.
- Enter your KRA PIN in the provided field and click Continue.
- Enter your password in the provided field. Navigate to the Security Stamp option, solve the arithmetic problem, and enter the answer in the provided field. Once everything is correctly filled, click Login.
- Once you’re logged in, navigate to Returns.
- On the Returns menu, select File Nil Returns.
- On the next screen, navigate to Tax Obligation and select the relevant option, e.g, Income Tax Resident Individual. Click Next.
- Choose the Return Period From and Return Period To. For example, 01/01/2024 to 31/12/2024. Click Submit.
- A system-generated alert appears asking if you’re sure you want to file a Nil Return. Select OK.
- That’s all. You have successfully filed your Nil return on iTax. You should see a Return Receipt Generated notification on the screen, along with a link to download the receipt. Click on the Download Return Receipt link.
- The receipt will be downloaded to your device. Open it to review.
Benefits of Filing Nil Returns
So, why should you file Nil returns?
Compliance
Filing a Nil return in Kenya is mandatory, as directed by tax laws and regulations. You should file your returns on time to stay compliant. Failure to file these returns will have your account flagged as non-compliant, and you can’t obtain a tax compliance certificate from KRA.
Avoiding Penalties
Failure to file Nil returns on time attracts a Ksh. 2000 penalty or 5% of the tax due. Late filing is also penalized. You should file your Nil returns in the stipulated time, such as on or before the 20th of the following month for monthly returns, or on or before the 30th of June of the following year for annual returns.
Tips and Tricks to File Nil Returns on iTax like a Pro
Here are tips and tricks you should follow for quick, smooth, and error-free filing of Nil returns:
- The Earlier the Better: Don’t wait until the last minute to file your Nil return. The iTax portal is known to freeze or crash near the deadline due to too much traffic. When you file your returns early enough, the process should take you a few minutes.
- Save Your iTax Login Password: You can always use the Forgot Password option to reset your iTax login password. However, you’re better off saving your password securely to simplify the process.
- Always Download the Return Receipt: Please download the e-Return Acknowledgement Receipt and review it to make sure your returns were accurately filed.
- Use a Desktop Browser: While it’s possible to file your Nil returns on any browser-supported device, including a mobile phone, consider using a desktop. The iTax portal is not fully mobile-friendly, and filing on a wider screen helps avoid errors.
- Bookmark the iTax KRA Portal Webpage: Add the iTax portal webpage to your favorites for quick and easy access.
- Select the Correct Dates for the Return Period: KRA will likely reject your return if your details are incorrect. One of these details is the return period. Whether it’s a monthly or annual return, ensure you know the correct dates for the return period.
- Know your Tax Obligation: Another area where taxpayers make mistakes when filing a Nil return is choosing their tax obligation. Is it income tax? Is it Individual or Non-Individual? Are you a resident or non-resident? Know your tax obligation and select it correctly.
- Set a Reminder: Life might get so busy and overwhelming that you forget to file your returns on time. Avoid penalties by setting calendar reminders to file your returns.
Final Words
Filing tax returns is a legal obligation for every KRA PIN holder, with or without an income. This post explained how to file Nil returns on iTax and why you need to do it. If you need help filing your tax returns or have other tax advisory needs, chat with us at Gichuri & Partners. We are your trusted partner in tax strategy, compliance, and advisory services.
Related guide: applying for a Tax Compliance Certificate on iTax.
