A home loan provisional certification is essentially a statement of your home loan account. It includes the summary of the interest and the principal amount you have repaid overall and in a specific financial year. It also contains details of the outstanding amount and the number of years of EMI payments until you repay the full amount.
In a nutshell, it is like your savings account passbook. The home loan provisional certificate also serves as a proof of your loan repayment. In the event of any legal issues with the lender due to difference in home loan interest rates or non-payment of the EMIs, you can use this certificate as evidence in the court to underpin your claim.
The lenders typically issue the home loan provisional certificate at the end of the financial year. However, you can get a copy of the same at any time you want for taxation purposes.
How to get the home loan provisional certificate?
Unlike the home loan process, getting a home loan provisional certificate from your lender is easy, and you can do it from your home. Today, all the leading financial institutions in India, including banks and HFCs (Housing Finance Companies) offer online services.
So, to get your home loan provisional certificate, you just have to visit the official website of the lender and login into your home loan account using the unique ID and password. Once you log in, you can easily access the home loan summary, the provisional tax certificate, and any other relevant document you need.
If you are not comfortable with the online process, you can also visit the nearest branch of the lender’s office and the official for a home loan provisional certificate in person. Of course, you must provide them with details like home loan account number, and PAN (Permanent Account Number).
Uses of a home loan provisional certificate?
One of the important reasons why people ask for a home loan provisional certificate is to use it as a proof of home loan repayment and get tax benefit.
Under Section 80C of the Indian Income Tax Act, you can claim a tax deduction up to Rs. 1.5 lakhs in a financial year on the repayment of the home loan principal amount. Additionally, you can get a tax benefit of up to Rs. 2 lakhs on the repayment of home loan interest Under Section 24 of the IT Act.
However, to get the tax benefit, you must submit certain proof of the payments like the home loan provisional certificate.
If you have opted for a joint home loan with your spouse or any other family member, you both can obtain the home loan provisional certificate from the lender to get tax deduction. However, you must be aware of the following rules:
When you opt for a joint home loan, the interest payment will be divided between the owners based on the proportion of their ownership. And, if the percentage is not specified, the interest portion of the loan EMIs will be split equally in 50:50 ratio.
Also, for the both the partners to be able to get the tax benefit, the borrowers must be co-owners of the property.
Now that you are aware of the importance of a provisional home loan certificate and how you can get it, make the most out of it and enjoy the tax benefits.