The home loan provisional certificate serves as a proof for tax deductions on the interest and principal paid. Since this is the tax saving season, you should know how to read and interpret the details of the certificate.
What is a home loan provisional certificate?
A home loan provisional certificate is a statement of your home loan account provided by your lender. It has the summary of the interest and the principal amounts paid by you towards your home loan for the current financial year.
What is its use?
The Home loan provisional certificate is essential for claiming tax deductions.
Under Section 80C of the income tax act, you can claim tax deductions up to Rs 1.5 lakh on the principal amount of the home loan. Also, you get tax deduction of up to Rs 2 lakh on the interest paid under section 24 (b) of the income tax act.
You will be required to submit your home loan provisional certificate to your employer.
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I had opted for a home loan moratorium. Will it be reflected in the provisional certificate?
Yes, availing of the loan moratorium would have reduced the tax deduction benefit on the principal repayment, as you wouldn’t have paid the equated monthly installments (EMIs) for this financial year. As per section 80C, to claim tax deduction benefit on principal repayment, actual payment is mandatory.
“However under section 24 (b) of the income tax act, you can claim tax deduction on the interest amount accrued during the financial year even if you have opted for a loan moratorium. The tax deduction will be of interest amount payable within the prescribed limits in the financial year,” says Karan Batra, Founder of Charteredclub.com.
The home loan provisional certificate will contain information on the borrowed loan amount, monthly instalments, principal amount paid and interest component on accrual basis for the financial year.
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I have a home loan jointly with my spouse. Can both of us submit the same home loan provisional certificate and claim tax deduction?
Yes. But the condition here is that you need to be a co-owner of the property being purchased.
In the case of joint home loans, the total interest payment is allocated between joint owners based on the proportion of their ownership. In case the percentage share is not specified, the interest portion of loan instalments or EMIs are equally split.
Can we get the certificate online?
Yes. These days a majority of the lenders have made it possible for their customers to access the home loan provisional certificate online. Login to your net banking account, enter home loan account number, date of birth, loan and EMI amounts. Then you can view any document related to your home loan. You can also access the certificate using the mobile app of your bank.
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Is there a way to get the home loan provisional certificate offline?
To apply offline, visit the nearest branch of the bank. You will have to fill the request form. Submit the form along with the required documents such as Aadhaar, PAN or passport copy to the branch.
Some banks also provide the option of getting the home loan provisional certificate using their toll-free number customer care numbers.
There are no charges for getting this certificate either online or offline.