KEY TAKEAWAYS
- To get a tax refund, it usually means you overpaid your taxes the previous year.
- Regular employees can avoid them by correctly filling out the appropriate forms and keeping it up to date.
- Self-employed individuals can avoid it by estimating their yearly deductions more accurately and timely.
What is a tax refund? A tax refund is a reimbursement of excess tax paid in a given period to a federal government. Upon filling an individual income tax return form, a tax refund may arise from the following;
- Insurance policies on life and education that have not been granted relief by the employer on the same,
- Having a mortgage from a specific financial institution (as listed on the 4th schedule on Income Tax Act), and has not been granted relief by the employer on the same,
- A resident individual who was not granted personal relief during the year,
- If tax deducted at source was paid more than final liability.
When applying for a tax refund on Income Tax, there are certain documents required depending on the situation that resulted in the refund. These documents include:
1. P9 Form for claims relating to excess PAYE deductions,
2. Insurance policy certificates for claims relating to insurance relief,
3. Mortgage certificate from a financial institution for claims relating to interest on mortgage,
4. Withholding tax certificates for claims relating to tax deducted at source.
Taxpayers can apply for tax refund within five years from the date in which tax was paid through https://itax.kra.go.ke/KRA-Portal/.
