CTA Personal Income Tax Exam 2026/2027
Kenya: 110 Solved Questions, Notes &
Answers (PDF Download)
Description:
CTA Personal Income Tax Exam 2026/2027 Kenya — 110 solved questions covering PAYE,
rental income, capital gains tax, turnover tax, gratuity, SHIF, Housing Levy, tax amnesty,
ESOPs, DTAs, pension lump sums, trusts, loss relief, and Finance Act 2026 changes.
Includes multiple choice, true or false, computations, case studies, advanced topics, full
workings, explanations, KRA tax rates, and examiner-style marking guidance. Ideal for CTA,
CPA, and KASNEB revision. Fully updated for the 2026/2027 syllabus and examinable from
2027.
Download your free CTA Personal Income Tax Exam 2026/2027 PDF now and pass with
confidence!
, Subject: Personal Income Tax (CTA Level)
Time Allowed: 4 Hours 30 Minutes
Total Marks: 150
INSTRUCTIONS TO CANDIDATES:
1. This paper contains FIVE (5) sections: A, B, C, D, and E.
2. Answer ALL questions in Sections A and B.
3. Answer ANY FOUR (4) questions in Section C.
4. Answer ANY TWO (2) questions in Section D.
5. Answer ALL questions in Section E.
6. All computations must be shown clearly. Marks are allocated for workings.
7. Tax rates and tables are provided in the Appendix. Use these unless otherwise stated.
8. Assume all individuals are resident in Kenya unless otherwise stated.
APPENDIX: TAX RATES AND THRESHOLDS (2026)
PAYE Tax Bands (Monthly — effective 1 July 2023, retained for 2026):
Monthly Taxable Pay (KES) Annual Taxable Pay (KES) Rate
On the first 24,000 On the first 288,000 10%
On the next 8,333 On the next 100,000 25%
On the next 467,667 On the next 5,612,000 30%
On the next 300,000 On the next 3,600,000 32.5%
On all income above 800,000 On all income above 9,600,000 35%
Source: KRA PAYE Guidelines; Finance Act 2023 rates retained for 2026
Key Reliefs and Thresholds:
, Personal relief: KES 2,400 per month (KES 28,800 per annum)
Insurance relief: 15% of premiums paid, capped at KES 5,000/month (KES 60,000/annum)
Pension contribution deduction: max KES 30,000 per month (KES 360,000/annum)
Mortgage interest deduction: max KES 360,000 per annum (KES 30,000/month)
Tax-exempt per diem: KES 10,000/day
Individual filing deadline: 30 April following the year of income (effective 1 January 2027)
Other Rates:
Capital gains tax: 15% of net gain
Residential rental income tax: 7.5% of gross (for residents earning KES 288,000–15M)
Non-resident rental income tax: 30% on gross rent from immovable property; 15% on movable
property
Turnover tax: 3% (turnover KES 1M–25M)
SEP tax: 3% effective (10% of turnover deemed profit × 30%)
Withholding tax on professional fees to non-residents: 20%
Withholding tax on qualifying dividends (residents): 5%
Withholding tax on qualifying interest: 15%
Withholding tax on gambling winnings: 20% (both residents and non-residents)
, CTA Personal Income Tax Exam 2026/2027 Kenya — Questions &
Answers
SECTION A: MULTIPLE CHOICE (Questions 1–30)
Instructions: Choose the best answer. Each question carries 1 mark. (30 marks)
Question 1
Under Section 2 of the Income Tax Act (Cap 470), an individual is deemed resident in Kenya for
a year of income if they have a permanent home in Kenya and are present in Kenya for:
A) At least 183 days in the year of income
B) Any period during the year of income
C) At least 122 days in the year of income and in each of the two preceding years
D) At least 91 days in the year of income and 365 days over three years
Answer: B
Explanation: The permanent home test under Section 2 overrides the day-count tests. If an
individual has a permanent home in Kenya and is present for any period during the year, they are
resident. The 183-day test applies where there is no permanent home.
Question 2
The Finance Act, 2026 amended Section 5(1) of the ITA to introduce an exception for non-
resident individuals employed by Kenya Airways. Under this amendment, such individuals are:
A) Fully exempt from Kenyan tax on all employment income
B) Taxable only on income attributable to duties performed within Kenya
C) Taxable at a flat rate of 15% on all income
D) Taxable on worldwide income as residents
Answer: B
Explanation: The proviso provides that income of a non-resident individual employed by the
national carrier shall not be deemed to accrue in Kenya to the extent that it relates to duties
performed outside Kenya and is connected to international transport operations.
Kenya: 110 Solved Questions, Notes &
Answers (PDF Download)
Description:
CTA Personal Income Tax Exam 2026/2027 Kenya — 110 solved questions covering PAYE,
rental income, capital gains tax, turnover tax, gratuity, SHIF, Housing Levy, tax amnesty,
ESOPs, DTAs, pension lump sums, trusts, loss relief, and Finance Act 2026 changes.
Includes multiple choice, true or false, computations, case studies, advanced topics, full
workings, explanations, KRA tax rates, and examiner-style marking guidance. Ideal for CTA,
CPA, and KASNEB revision. Fully updated for the 2026/2027 syllabus and examinable from
2027.
Download your free CTA Personal Income Tax Exam 2026/2027 PDF now and pass with
confidence!
, Subject: Personal Income Tax (CTA Level)
Time Allowed: 4 Hours 30 Minutes
Total Marks: 150
INSTRUCTIONS TO CANDIDATES:
1. This paper contains FIVE (5) sections: A, B, C, D, and E.
2. Answer ALL questions in Sections A and B.
3. Answer ANY FOUR (4) questions in Section C.
4. Answer ANY TWO (2) questions in Section D.
5. Answer ALL questions in Section E.
6. All computations must be shown clearly. Marks are allocated for workings.
7. Tax rates and tables are provided in the Appendix. Use these unless otherwise stated.
8. Assume all individuals are resident in Kenya unless otherwise stated.
APPENDIX: TAX RATES AND THRESHOLDS (2026)
PAYE Tax Bands (Monthly — effective 1 July 2023, retained for 2026):
Monthly Taxable Pay (KES) Annual Taxable Pay (KES) Rate
On the first 24,000 On the first 288,000 10%
On the next 8,333 On the next 100,000 25%
On the next 467,667 On the next 5,612,000 30%
On the next 300,000 On the next 3,600,000 32.5%
On all income above 800,000 On all income above 9,600,000 35%
Source: KRA PAYE Guidelines; Finance Act 2023 rates retained for 2026
Key Reliefs and Thresholds:
, Personal relief: KES 2,400 per month (KES 28,800 per annum)
Insurance relief: 15% of premiums paid, capped at KES 5,000/month (KES 60,000/annum)
Pension contribution deduction: max KES 30,000 per month (KES 360,000/annum)
Mortgage interest deduction: max KES 360,000 per annum (KES 30,000/month)
Tax-exempt per diem: KES 10,000/day
Individual filing deadline: 30 April following the year of income (effective 1 January 2027)
Other Rates:
Capital gains tax: 15% of net gain
Residential rental income tax: 7.5% of gross (for residents earning KES 288,000–15M)
Non-resident rental income tax: 30% on gross rent from immovable property; 15% on movable
property
Turnover tax: 3% (turnover KES 1M–25M)
SEP tax: 3% effective (10% of turnover deemed profit × 30%)
Withholding tax on professional fees to non-residents: 20%
Withholding tax on qualifying dividends (residents): 5%
Withholding tax on qualifying interest: 15%
Withholding tax on gambling winnings: 20% (both residents and non-residents)
, CTA Personal Income Tax Exam 2026/2027 Kenya — Questions &
Answers
SECTION A: MULTIPLE CHOICE (Questions 1–30)
Instructions: Choose the best answer. Each question carries 1 mark. (30 marks)
Question 1
Under Section 2 of the Income Tax Act (Cap 470), an individual is deemed resident in Kenya for
a year of income if they have a permanent home in Kenya and are present in Kenya for:
A) At least 183 days in the year of income
B) Any period during the year of income
C) At least 122 days in the year of income and in each of the two preceding years
D) At least 91 days in the year of income and 365 days over three years
Answer: B
Explanation: The permanent home test under Section 2 overrides the day-count tests. If an
individual has a permanent home in Kenya and is present for any period during the year, they are
resident. The 183-day test applies where there is no permanent home.
Question 2
The Finance Act, 2026 amended Section 5(1) of the ITA to introduce an exception for non-
resident individuals employed by Kenya Airways. Under this amendment, such individuals are:
A) Fully exempt from Kenyan tax on all employment income
B) Taxable only on income attributable to duties performed within Kenya
C) Taxable at a flat rate of 15% on all income
D) Taxable on worldwide income as residents
Answer: B
Explanation: The proviso provides that income of a non-resident individual employed by the
national carrier shall not be deemed to accrue in Kenya to the extent that it relates to duties
performed outside Kenya and is connected to international transport operations.
