Is it Possible to get a Loan Against Property Without ITR?

Getting a loan is one of the most common ways to meet urgent financial needs in India. Whether it’s for your child’s education, medical bills, or expanding your business, a Loan Against Property (LAP) is often a reliable option. But there’s one question that keeps popping up – is it possible to get a Loan Against Property without ITR?

Let’s break this down in a simple, practical, and real-world way, especially from an Indian perspective. Many individuals in India don’t have a regular ITR (Income Tax Return) filing history. This is especially true for small business owners, farmers, homemakers, and people working in the informal sector. So, can they still apply for a loan? The answer is yes, but with a few conditions.

What is a Loan Against Property?

A Loan Against Property is a type of secured loan where you use your residential, commercial, or even rented property as security. The amount you can borrow depends on the property's current market value, usually up to 60–70%. Since it's backed by an asset, the interest rates are generally lower compared to unsecured loans like personal loans.

People usually take such loans for business purposes, medical emergencies, or big-ticket expenses. The best part is that you still own the property while using its value to raise funds.

Also Read: What is Loan Against Property? - Features, Eligibility, Documents, and more.

Why do Lenders Ask for ITR?

Most lenders in India ask for ITR documents because they want to see if you have a steady source of income. ITR helps them evaluate your repayment capacity. It also gives them a clear picture of your financial habits and income patterns over the years.

If you’re salaried or run a registered business, showing ITRs for the past two or three years is usually standard practice. However, not everyone falls under this bracket, especially in India, where many earn in cash or through informal channels.

Is it Really Possible to get a Loan Without ITR?

Yes, it is absolutely possible to get a Loan Against Property without ITR. Many lenders understand the nature of the Indian economy, where a significant portion of the population earns informally. People like shop owners, auto drivers, freelancers, or even those running home-based businesses might not always file income tax returns, but they still earn regularly.

To apply without an ITR, you’ll need to provide other documents to show that you can repay the loan. Lenders often look at your savings, property documents, bank statements, and any existing loans or assets to decide.

For example, if you’ve been depositing regular amounts in your bank account or receiving steady rent from a property, these can act as alternate proofs of income. Some lenders might also consider utility bills, GST filings (if applicable), or income certificates issued by local authorities.

Who Can Get a Loan Without ITR?

People who are self-employed or have unorganised income sources are usually the ones who apply for a Loan Against Property without ITR. These include small traders, farmers, street vendors, or even retirees. As long as they have a property in their name and some form of regular income, they are eligible.

In fact, some lenders even offer customised products for people in rural areas or for agricultural property owners, understanding that not everyone files taxes despite earning decently.

A Few Things to Keep in Mind

It’s not all smooth sailing, though. Taking a loan without ITR comes with its own set of challenges. For starters, the process may be slower. Since you’re not submitting ITRs, lenders might take extra time to verify your other documents. You might also face slightly higher interest rates since the perceived risk is higher.

There is also a higher chance that the lender will ask for a guarantor or insist on a co-applicant who has an ITR. This helps reduce their risk.

Still, if you own a property that has a good market value, and if you’re able to show some form of steady income, you stand a fair chance.

Also Read: Everything you should know about ITR filing

The Bottom Line

To wrap it up, yes—it is very much possible to get a Loan Against Property without ITR. But you need to be ready with strong alternate income proofs and a clean credit history. Keep your property documents in order and maintain a consistent bank record.

With the right approach and a trustworthy lender, your property can help you unlock the funds you need, even if you don’t have an ITR.

Apply for a Loan Against Property now and materialize your dreams today itself!

Moreover, if you’re looking to determine your EMIs accurately and plan your financial goals according to them, an online EMI calculator can be just what you need! It will accurately calculate your EMIs for you without any hassles.

FAQs

Q.1. What are the tax benefits of a LAP?

A. Under the tax benefit of Section 24(B) of the Income Tax Act of India, salaried individuals can avail of the Loan Against Property income tax benefits of up to INR 2 lakh on a LAP. This is applicable only if the loan amount is used for the purchase or construction of a new residential property.

Q.2. Who is exempted from filing ITR?

A. Senior citizens should be more than 75 years of age. Senior citizens should have been residents of India in previous years. He earns income from interest and pension only.

Q.3. What are the tax benefits of self-occupied property?

A. The tax benefits for self-occupied properties and let-out properties differ. For self-occupied properties, you can claim a tax deduction on the interest paid towards your home loan up to INR 2 lakh each year under section 24b. This limit of INR 2 lakh is aggregate for both self-occupied properties.

Q.4. Can property tax be claimed in ITR?

A. Yes, property tax can be claimed in the ITR if the property is let out. It's deductible from rental income but not applicable for self-occupied properties. Payment proof is essential.

Q.5. Who is exempt from property tax in India?

A. In India, property tax offers an exemption depending on the area. Exemptions include those for senior citizens, charitable foundations, and specific unoccupied buildings, houses or land located within a specific locality as per the city municipality’s act and order.

Disclaimer:

The contents of this article are for information purposes only and not a financial advisory. The information is subject to update, revision, and amendment and may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Godrej Capital or its Affiliates to any requirements. Godrej Capital or its Affiliates shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any decisions, financial or otherwise based on the contents and information mentioned. For more information, please visit www.godrejcapital.com