Any potential homebuyer knows that securing a home loan is a pivotal step in the property purchasing process. However, before a loan is approved, there is a critical requirement to submit a set of documents that ensure a smooth and speedy approval process. Understanding the complete list of documents required for a home loan can ease your journey towards owning your dream home. Here, we will also discuss the important aspects of Home Loan Tax Benefits.
Key Documents Required for Home Loan Approval
1. Proof of Identity
One of the primary documents required for home loan approval is proof of identity. Accepted proofs typically include:
– Aadhaar Card
– Voter ID
– Passport
– Driving License
– PAN Card
2. Proof of Address
Lenders need to verify your current residence. Commonly accepted address proofs are:
– Utility Bills (Electricity, Water, Gas)
– Rent Agreement
– Passport
– Voter ID
– Aadhaar Card
3. Income Proof
Your ability to repay the loan is assessed through your income documentation, which varies depending on your employment status.
For salaried individuals:
– Latest salary slips (last 3-6 months)
– Form 16 or Income Tax Returns (ITRs of last 2-3 years)
– Bank statements showcasing salary credits (last 6 months)
For self-employed individuals:
– ITRs (last 2-3 years)
– Profit and Loss statements
– Balance sheets audited by a certified accountant
– Business license details
– Bank statements (last 6-12 months)
4. Employment Proof
To establish job security, individuals should provide:
– Appointment letter
– Employment certificate from the employer
– Experience letters from past employers (if applicable)
5. Property Documents
Documents related to the property act as collateral for the home loan. Required documents generally include:
– Allotment Letter
– Sale agreement
– Receipts of payments made to the builder/seller
– Encumbrance certificate
– NOC from the builder or housing society
6. Proof of Age*
Age verification is essential primarily for profiling your repayment tenure:
– PAN Card
– Birth Certificate
– Passport
– Aadhaar Card
– School/College Transfer Certificate
Home Loan Tax Benefits
Apart from the documents required for home loan approval, another significant advantage that homebuyers should consider is the Home Loan Tax Benefits.
1. Section 80C
Under Section 80C of the Income Tax Act, you can claim a deduction of up to INR 1.5 lakh on the principal repayment of the home loan. This benefit is available for the purchase or construction of a new house.
2. Section 24(b)
Under Section 24(b), the interest portion of your home loan EMI is eligible for a deduction. You can claim a deduction of up to INR 2 lakh for the interest paid on your home loan annually.
3. Section 80EE and 80EEA
First-time homebuyers get additional benefits under Section 80EE, where they can claim an extra deduction of INR 50,000 on the home loan interest. Further, under Section 80EEA, an additional deduction of INR 1.5 lakhs can be availed if the stamp duty value of the residential home is Rs 45 lakhs or less.
Conclusion
Applying for a home loan can seem daunting, but knowing the complete list of documents required for home loan approval makes the process straightforward. Ensuring you have all necessary documentation ready can facilitate a faster approval, bringing you a step closer to your dream home. Additionally, be sure to leverage the various home loan tax benefits, which can significantly alleviate the financial burden associated with buying a property. With the right approach and meticulous preparation, your dream home is well within reach.
