Is Form 16 Required For A Home Loan?

Form 16 is a compulsory document for applying for a home loan. It is one of the essential home loan documents required that is asked as income proof for the individual. The official document has salary breakup along with tax liabilities, which is important for assessing home loan eligibility.

What is form 16? 

Form 16 is proof of income that is accepted and required in the documentation for a housing loan. It is an official certificate that is issued by the income tax office. It is submitted by a particular employer to the income tax department. This document has every piece of information and details about how much tax the particular employer deducted and when it was actually submitted on the income tax returns. 

This is one of the accepted proofs of income because, on form 16, the salary of the employee is clearly stated. In the case of a house loan, income proof is a must and a compulsory document that is submitted by the borrower. Form 16 is a vital official document that is used as proof of income.

Why is form 16 important in home loans? 

• Firstly, form 16 is used as proof of income for the individual taking a housing loan. Income proof is compulsory to get a home loan approved. Loan providers always require an official copy of form 16 where it is clearly stated about the TDs and the income tax returns. Individuals need to get their form 16 from their respective employers in order to submit it for the housing loan documentation.

• At the time of borrowing, Form 16 is important to show the income tax return that they have filed at the time of applying for a housing loan. If you check properly, form 16 actually gives the proper format and your gross salary complete details. Not only this, even the tax liabilities are checked at the time of evaluating the home loan application. It is a compulsory document that is submitted at the time of taking a housing loan.

Finishing up

Form 16 is an important home loan document required by banks and non-banking financial institutions. If you want an affordable home loan, you need to meet the home loan eligibility requirements properly.