(i) Royalties
- Royalty income is taxed on the basis of residence.
- Resident tax payer
- He is taxed in two stages that is a withholding tax of 5% which is not final tax.
- Net royalties that is gross royalties less expenses are added to other incomes.
- A tax relief is granted for withholding tax earlier paid.
- Nonresident tax payer, royalties are taxed at 20%. This tax is a final tax
(ii) Dividends from a co-operative society
- These are non-qualifying dividends.
- A withholding tax of 15% is levied which is not final tax.
- Gross dividends are added to other incomes of the taxpayer.
- A tax relief is granted for withholding tax earlier deducted
(iii) Pension income
- Monthly pension income is exempt to tax up to Sh.25, 000; and in case of lump-sum pension income, Sh.600,000 is exempt from taxation
(iv) Interest from housing development bonds.
-The first interest of Sh.300, 000 deposited in the bond will attract withholding tax of 10% and thereafter normal rate of 15%.
Wilfykil answered the question on February 15, 2019 at 10:44
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