3(1) Subject to , and in accordance with, this Act, a tax to be known as income tax shall be charged for each year of income upon all the income of a person, whether resident or non-resident, which accrued in or was derived
from Kenya.

(2) Subject to this Act, income upon which tax is chargeable under this Act is income in respect of –

(a) gains or profits from –

(i) a business, for whatever period of time carried on;

(ii) employment or services rendered

(iii) a right granted to another person for use or occupation of property;

(b) dividends or interest;

(c)

(i) a pension, charge or annuity; and

(ii) any withdrawal from, or payments out of, a registered pension fund, or a registered provident fund or a registered individual retirement fund; and

(iii) any withdrawals from registered home ownership savings plan.

(d) (Deleted by 14 of 1982, s.17);

(e) an amount deemed to be the income of a person under this Act or by rules made under this Act;

(f) gains accruing in the circumstances prescribed in, and computed in accordance with, the Eighth Schedule.

(g) subject to section 15(5A), the net gain derived on the disposal of an interest in a person, if the interest derives twenty per cent or more of its value, directly or indirectly, from immovable property in Kenya; (added Finance Act 2011) and

(h) a natural resource income;

(3) For the purposes of this Section –

(a) “person” does not include a partnership;

(b) a bonus or interest paid by a designated co-operative society, as defined under section 19A, shall be deemed to be a dividend.

(c) for the purposes of subsection (2)(g) and section 15(5A)–

(i) “immovable property” means a mining right, an interest in a petroleum agreement, mining information or petroleum information;

(ii) “net gain”, in relation to the disposal of an interest in a person, means the consideration for the disposal reduced by the cost of the interest; and

(iii) the terms “consideration”, “cost”, “disposal”, “interest in a person”, “mining information”, “mining right”, “person”, “petroleum agreement”, and “petroleum information” have the meaning assigned to them in the Ninth Schedule.