Home Loan eligibility

POSTED BY CA Karan Batra ON May 19, 2013 2:08 pm COMMENTS (6)

Dear Sir

I read on a bank website that the following documents are required for approval of home loan in case of Self employed individuals:-


  • Income Tax Returns, P&L A/c & Balance Sheet of past 3 years
I started working 2 years back… so in my case I only have P&L A/c & Balance sheet of past 2 years only… but I do have ITR of past 4 years in which i have only disclosed Income from FD 
So my question is:-
  1. Based on the above facts, do you think my bank loan will get approved
  2. I heard that if I apply for a Home Loan and if my application gets rejected this will also affect the CIBIL Score. Is this true ???
PS: I have good knowledge of taxes but only half knowledge in case of Home Loans


6 replies on this article “Home Loan eligibility”

  1. dear karan, it’s advisable to change the bank or HFC. Switch to the one where you are getting the loan.



  2. The Banks just arent ready to accept my file 🙁

    They want 3 years ITR + P&L + Balance Sheet

    They say – for the purpose of eligibility – past 2 years statements are considered

    but for the purpose of sanctioning the loan, they require the business to be in existence for 3 years… so they require statements of past 3 years…

  3. Dear Karan, the ITR filed by you itself is a proof & bank is not going to cross check it from Income Tax deptt. My personal take – even if you are not having 3Ys’ ITR, still you can apply & get loan. Please look at the underlying things that banks check through your ITR.

    1. The reported white income.
    2. Year on year, the increase in Income.
    3. The overall networth

    The bank statements & P&L as well as Balance sheets ‘ll certify your cashflow positions & the overall loan servicing capacity in terms of your existing EMI that you are already paying & proposed loan’s EMI.



  4. Thanks Manish for the feedback

    Another thing I would like to ask here is that does the Bank check the details with the Income Tax Dept… I heard that they don’t check the details… Is this true ???

  5. Hi Karan

    Let me give you some inputs which I know on this (others can add more)

    1. Generally all the banks have various ways (formula’s) to arrive at your loan eligibility . Looking at your ITR + Bank Statements is one of them . Another can be just looking at your bank cash inflow and not ITR ! . In case of Professionals like you , The process is a little different and careful from bank side.

    2. Its 3 yrs ITR , but even 2 yrs will do . 3 yrs is desirable , not a hardcore requirement unless its SBI or banks of that league who are very strict in everything 🙂

    3. You should do 3 things now

    a) Make a 2 page profile of yourself where you put all the points which is in your favour , which shows you as a strong person (like you are an author , won awards for excellence, considered as top 10 CA in Delhi , something like this) . There is a team which looks at your profile and thinks what to do next . There is lot of weitage on this .

    b) Get the Bank statements for last 1 yr to show them the proof of Inflow of Income even if ITR does not have the trace of that 🙂 .

    c) Get ITR for last 2 yrs if there ,and anyways you can file this year ITR right now .

    Talk to the guy who comes to you straight with the exact conditions , Note that those guys are hard pressed for targets and they are always on your side to get loan , they will show you the way 🙂


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