Home Loan Provisional Certificate: Meaning and Its Importance

A home loan provisional certificate is a statement that shows how much money someone borrowed to buy a home and it is provided by the lending institution. This statement serves as proof of the home loan repayment. The statement tells how much money the person has to pay back in a year for the loan and the interest on that money.

Table of Contents

• Importance of Housing Loan Interest Certificate
• Process of Obtaining a Home Loan Interest Certificate from a Bank
• SBI Bank Home Loan Provisional Certificate
• AXIS Bank Home Loan Provisional Certificate
• HDFC Bank Home Loan Provisional Certificate
• Tax Benefits of a Home Loan Provisional Certificate

This provisional home loan interest certificate can be obtained at the beginning of a financial year that indicates the payable amount of the loan and its interest for that financial year.

Importance of Home Loan Interest Certificate

The most important use of the provisional home loan certificate is to claim tax deductions. The principal loan amount and the home loan EMIs are subject to concerned tax deductions under Section 80C of the Income Tax Act. One can claim a deduction up to a maximum of ₹1,50,000 on the principal loan amount and up to ₹2,00,000 on the interest claim as per Section 24 of the Income Tax Act. Additionally, one can claim deductions for the house registration fees and stamp duty charges. Therefore, to claim these tax deductions, the home loan certificate for income tax becomes so important to have while filing IT returns.

Process of Obtaining a Home Loan Interest Certificate from a Bank

The process of getting the home loan provisional certificate from the concerned banks is quite simple since all banks today have their own official websites and mobile applications. All one needs to do is to log in to their accounts through the website or mobile app, and download the provisional certificate, along with the loan summary statement and other important housing loan documents. 

Alternatively, one can choose to visit the nearest branch of the concerned bank and request the bank officials for the provisional certificate in person. One has to furnish some documents required for a provisional certificate, such as a copy of a PAN card, Aadhaar card, loan document, etc.

Now, that you know the importance of a home loan interest certificate for income tax returns, let’s look at the process for obtaining it from some of the top banks in India.

Suggested read: Home Loan Disbursement Process

SBI Bank Home Loan Provisional Certificate

Follow the steps to obtain the certificate from the State Bank of India official website:

Step 1: Search on the internet and visit the following link from the official website of SBI
Step 2: Put in your login ID and password, enter the CAPTCHA code, and then put the OTP received on your registered mobile number or email id to enter the SBI dashboard. 
Step 3: On the header, look for the ‘Enquiries’ tab, and then click on the ‘Home Loan Interest Certificate (Provisional)’ link under it.
Step 4: The final step is to select the account under which the home loan has been taken. Click on the certificate that appears on the screen to view, download, and print it.

Alternatively, you can visit the nearest SBI branch and after submitting the required documents, you can get the certificate in person.

Suggested read: Home Loan Process

AXIS Bank Home Loan Provisional Certificate

Step 1: There are different ways to get the home loan provisional certificate from Axis Bank.
The easiest way is to get it online. Once on the AXIS bank official website or mobile app, you need to search for the loan account dashboard. From the dashboard, you can look for the ‘View Interest Certificate’ option. Thereafter, all you need to do is to select ‘Loans’ followed by ‘Request Statement’. Finally, you need to choose the ‘Interest Certificate’ to view it, with the option available for downloading and printing.
Step 2: Alternatively, as mentioned above, you can go and meet officials of the nearest AXIS bank branch for the certificate.
Step 3: Call their customer service at 1860-500-5555 / 1860-419-5555 and request them to share your loan certificate through email is another option.

HDFC Bank Home Loan Provisional Certificate

Similar to the other two banks, almost the same process has to be followed for HDFC bank as well

Step 1: Search for HDFC Bank's official website or directly click on the link.
Step 2: Once the page opens, enter the loan account number and the CAPTCHA code 
Step 3: This will generate the loan certificate on the screen. Thereafter, you can choose to receive it either by post or email. In case you choose the former option, it will take two working days for you to receive the document while if you choose the latter option, you will get it almost immediately.

The above-mentioned processes can be done for almost all banks to get the home loan provisional certificate.

Tax Benefits of a Home Loan Provisional Certificate

Here's an overview of the tax benefits that can be leveraged through this provisional certificate:

1. Deductions on Principal Repayment: Under Section 80C of the Income Tax Act, 1961, the principal component of the home loan repayment is eligible for a tax deduction. The maximum limit for this deduction is INR 1.5 lakh annually. This section covers various other investments and expenditures too, so it’s essential to plan accordingly to maximize the benefit from the principal repayment.
2. Deductions on Interest Payment: Section 24(b) of the Income Tax Act allows homeowners to claim a deduction on the interest paid on their home loan. The limit for this deduction is INR 2 lakh per annum for a self-occupied property. For let out property, there is no upper limit on the interest amount that can be claimed.
3. Additional Deduction for First-Time Homeowners: Under Section 80EE, first-time homeowners can claim an additional deduction on interest paid over and above the limit under Section 24(b). This deduction is up to INR 50,000 per annum, provided certain conditions are met, such as the loan amount being less than INR 35 lakhs and the value of the property not exceeding INR 50 lakhs.
4. Deduction for Joint Home Loan: If the home loan is taken jointly, then each of the co-borrowers can individually claim the deduction for home loan interest up to INR 2 lakh and principal repayment under Section 80C up to INR 1.5 lakh, provided they are also co-owners of the property. This effectively doubles the tax-saving potential when compared to a loan taken by a single borrower.
5. Improved Tax Planning: The provisional certificate allows for better tax planning. By providing an estimate of the interest and principal amounts for the year ahead, borrowers can adjust their tax declarations at the beginning of the year, thus optimizing their monthly take-home salary by reducing the tax deducted at source (TDS) based on these anticipated deductions.

Suggested read: HDFC Housing Loan Interest Rate

FAQs on Provisional Home Loan Certificate