Banks and non-banking financial companies such as Bajaj Finserv offer borrowers a statement of their home loan account, as a summary of the interest and the principal amount the borrower has repaid towards their home loan for the financial year. This is a home loan certificate that serves as a proof of home loan repayments by the borrower.
In several cases, the lender may also provide a provisional certificate for home loan at the beginning of the financial year to indicate the amount the borrower has to pay for that year.
It is very easy to obtain a provisional certificate for home loan, as most lenders allow their customers to access their home loan details online. Therefore, the borrower only has to visit the official website of the lender or download the app, login to their account, and access their home loan statement, provisional certificate for home loan, and other relevant documents.
Borrowers mostly use the provisional certificate for home loan for claiming tax deductions. There are different tax deductions for the principal and the EMI component of a home loan. The borrower can claim a certain amount against the principal they have repaid, under Section 80C of the Income Tax Act. Likewise, they can claim a part of the interest they have paid, under Section 24. Additionally, they can also claim the registration fee and stamp duty charges as deductions.
For successfully availing these home loan tax benefits, the borrower requires to submit their home loan certificate or home loan provisional certificate while filing their returns.