The Importance of Income Tax Returns (ITR) for Home Loan Approval and How to File It in 2024

 For many individuals who dream of owning a home, securing a home loan is a crucial step. One of the key factors that lenders scrutinize during the loan approval process is your Income Tax Returns (ITR).

Why Income Tax Returns (ITR) are Crucial for Home Loan Approval

• Verification of Income Stability Lenders requires proof of stable income to ensure you can repay the loan. ITRs provide a detailed account of your income, offering lenders a clear picture of your financial health. With Ruloans, we have tie-ups with top banks and NBFCs who emphasize the importance of consistent income records in approving home loans.
• Assessment of Repayment Capacity Your ITR helps lenders evaluate your ability to repay the loan. By analyzing your income sources and financial consistency, lenders can determine your repayment capacity, which is a crucial factor in the loan approval process.
• Trustworthiness and Credibility to Lenders Submitting ITRs enhances your credibility. It shows lenders that you are financially responsible and compliant with tax laws, making you a more attractive candidate for home loans. Ruloans’ extensive network of financial partners values borrowers with transparent financial histories.
• Compliance with Legal Requirements Filing ITRs is mandatory for individuals earning above a certain threshold. By providing these documents, you ensure compliance with legal requirements, which is essential for a smooth loan approval process with Ruloans’ partner banks and NBFCs.

Role of ITR in the Home Loan Approval Process

• How Lenders Evaluate ITR

Lenders meticulously review your ITRs to understand your total income, deductions, and tax liabilities. This helps them gauge your financial stability and decide on your loan eligibility. With Ruloans, our partner institutions use this detailed evaluation to offer you best loan terms.

• Minimum ITR Requirements for Different Types of Loans

Different loans may have varying ITR requirements. Typically, lenders require two to three years of ITRs to confirm consistent income. For self-employed individuals, additional documentation like profit and loss statements may be necessary.

How to File Income Tax Returns (ITR) in 2024

Step-by-Step Guide to Filing ITR

1. Gather Necessary Documents Collect essential documents such as Form 16, Form 26AS, bank statements, investment proofs, and receipts for deductible expenses.
2. Choose the Correct ITR Form Select the appropriate ITR form based on your income sources. For most salaried individuals, ITR-1 (Sahaj) is applicable.
3. Online Filing vs. Offline Filing Online filing is convenient and efficient. Visit the Income Tax Department website, log in, and follow the instructions to file electronically. Offline filing involves downloading the form, filling it out, and submitting it to the Income Tax office.

Common Mistakes to Avoid

• Incorrect Personal Details: Ensure your name, PAN, and contact information are accurate.
• Mismatched Income Details: Cross-check your income details with Form 16 and Form 26AS.
• Missing Deductions: Include all eligible deductions to reduce your taxable income.
• Incomplete Form: Double-check all fields before submission.

Tips for a Hassle-Free Filing Experience

• Start Early: Avoid last-minute rush by starting your preparation early.
• Use Reliable Software: Consider using reliable tax filing software for accuracy.
• Seek Professional Help: If unsure, consult a tax professional to assist with filing.

Benefits of Timely and Accurate ITR Filing for Home Loan Approval

• Faster Loan Processing Accurate and timely ITR filing can expedite the loan approval process. Lenders can quickly verify your financial information and proceed with your application.
• Better Interest Rates A well-documented financial history can help secure better interest rates. Lenders are more likely to offer favorable terms to borrowers with consistent income records.
• Enhanced Loan Eligibility Accurate ITRs can enhance your loan eligibility by providing a clear picture of your financial health, increasing your chances of getting approved for a higher loan amount.
• Improved Financial Management Regular ITR filing promotes better financial management. It encourages you to keep track of your income, expenses, and investments, leading to more informed financial decisions.

Final Words!

Income Tax Returns (ITR) play an important role in the home loan approval process. They verify your income stability and repayment capacity while enhancing your credibility with lenders. As India’s largest loan distributor, Ruloans, with its vast network of over 25,000 distribution partners and strong partnerships with leading banks and financial institutions, can guide you through this process. By understanding the importance of ITRs and following the correct filing procedures, you can improve your chances of securing a home loan with favorable terms in 2024. Ensure timely and accurate filing of your ITRs to pave the way for a seamless home loan approval experience.

If you’re looking to work as a Home Loan DSA, consider joining Ruloans as a loan DSA partners. With Ruloan, it’s now easier than ever to register and offer your customers loans from top banks and financial companies. Visit our website to learn more!