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Is ITR Filing Necessary for a PNB Home Loan?

by Ayushi.sharma
ITR Filing

To apply for and receive a PNB home loan, you must provide documents that establish your identity, income, and address. An Income Tax Return (ITR) is one such document that can be used to prove the applicant’s income.

However, an ITR report is not mandatory for all. Read on to understand who needs to submit it and what other alternative documents can be submitted.  

Can Someone without ITR Filing Take a Home Loan?  

Yes, self-employed and small business owners can get a PNB home loan by filing ITRs. 

However, many such business people don’t maintain an accounts book and don’t have an accurate and detailed account of income and expenditure. Since their income is below the income tax threshold, they’re not obligated to file an ITR. 

The lender has a special home loan scheme under the affordable housing category for such applicants. The financing agency employs a special mechanism to assess the income and loan repayment capacity of an individual.

It sends its assessors to the applicant’s workplace to physically examine the assets, business, and raw account books. 

Based on their assessment, the lender approves the loan provided other documents that establish the applicant’s identity, address, age, etc., are in place. They will also look into the applicant’s credit history to see if he or she has taken a loan before and, if they have, whether the repayment has been timely and problem-free. 

They will endorse the loan application for processing if the findings are positive. If your credit score is not up to the mark, take corrective measures beforehand by taking steps like the following:

  1. Pay pending bills on time
  2. Reduce credit card balances
  3. Avoid taking out new debt too often
  4. Dispute incorrect credit report information, if you find any

What are the Standard Criteria for Home Loan Approval?  

A Home Loan is sanctioned after eligibility checks and verification. The lender reviews a set of key information about the applicant, such as identity, income, address, and credit history. 

Lending institutions such as PNB Housing Finance will assess the risks of giving an applicant a home loan based on the information provided through the documents. 

Our PNB Housing Finance reviews find that the eligibility and document requirements for salaried and self-employed home loan applicants are different when it comes to proof of income. 

Documents Required for a Home Loan

A duly filled application form supported by documentary evidence of Identity, Income, Residence, and Age needs to be submitted to the lender for approval. 

Here is a list of different official documents accepted by the lender, along with the home loan application. 

Identity Proof (Any one of them): 

  • PAN Card
  • Aadhaar Card
  • Voter’s ID Card
  • Passport
  • Driving License

Residence Proof (Any one of them):

  • Voter’s ID
  • Telephone Bill 
  • Bank Passbook
  • LIC Policy Receipt
  • Electricity Bill
  • Ration Card

Age Proof (Any one of them):

  • Birth Certificate
  • Aadhaar Card
  • Driving License
  • Bank Passbook
  • PAN Card
  • Passport
  • 10th Class Marks sheet

Employment Proof for Salaried Applicants 

  • Employment certificate 
  • Salary slips of 2 months
  • Form 16
  • Promotion letter (if you have any)
  • Employment contract
  • Bank statements for the last six months

Income Proof for Self-Employed Applicants 

  • 26 AS form
  • IT Returns of the last three consecutive years 
  • Proof of association with the company
  • Partnership agreements 
  • List of shareholders in the business 
  • Bank statements for the last six months

In Conclusion with ITR Filing

ITR reports are considered mandatory for self-employed people seeking home loans. But for such individuals whose income is below the taxable limit, ITR filing is not necessary, and it’s not mandatory for seeking a home loan.

In the latter case, where the applicant is self-employed or is running a small business with income not crossing the income tax threshold, the lender physically verifies the assets and income. 

Salaried applicants have other documents such as employment certificates, salary slips, and Form 16 to prove their income. 

Independent PNB Housing Finance reviews find that many self-employed people who have not filed ITRs have applied for and received PNB home loans.

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