In ascertaining the total income of a person for a year of income interest paid on amount borrowed from specified financial institution shall be deductible. The amount must have been borrowed to finance either:-
the purchase of premises or improvement of premises – which he occupies for residential purposes.
The amount of interest allowable under the law must not exceed Kshs.150,000 per year (equivalent to Kshs. 12,500 per month).
If any person occupies any premises for residential purposes for part of a year of income the allowable deduction shall be limited to the period of occupation.
On the other hand no person may claim a deduction in respect of more than one residence. Following amendment to Section 45 of the Income Tax Act through the 1999 Finance Act, a married woman can now file her own separate return of income and declare income from employment, professional or self-employment income. In view of this, she has the option to claim for deduction of interest paid provided that the property is registered in her name.
Employer must obtain a signed declaration to the effect that she is the one claiming the deduction to avoid her husband making a similar claim.
The financial institutions specified under the fourth schedule of the Income Tax Act include:-
– A bank or a financial institution licensed under the Banking Act.
– An insurance company licensed under the Insurance Companies Act.
– A building society registered under the Building Societies Act.
July 12, 2026 @ 1:14 am
Your comment is awaiting moderation.
The other day, while I was at work, my sister stole my iphone and tested to see if it can survive a 40 foot drop, just so she can be a youtube sensation. My iPad is now destroyed and she has 83 views. I know this is entirely off topic but I had to share it with someone!