Why TDS Payment is Important for any Loan Applicant?

TDS Payment

Why TDS Payment is Important for any Loan Applicant?

For getting a low interest rates for loan, the thing which you and your lender first focus is on your credit score and your eligibility criteria. The credit score is the very important that describe your credit history that you have paid to your lenders. Maintaining credit history is very easy, it requires only to pay the EMI at regular intervals within a time frame.

If the applicant is a salaried employee, then for applying for the loan, he must have to submit his salary proof. That you can get from their employer, as many people things that submitting a payslip are enough to verify for the salary income proof. But actually it’s not. You must have to get the Form 16 from your employer that is the only trusted certified proof of your income, which is issued by the government. You can low interest rates for loan, if you have good credit history and you have paid the tax.

How can you get the Form 16 from your employer?

Form 16 will act as your income certification from the government. Which is issued by your employer every month or quarterly. From your basic salary the TDS is deducted every month and at the end of every quarter you can get the report. Actually the TDS is deducted at the start of the financial year, but employers deduct the amount every month, so that it will not be a burden on the employee to pay the whole tax in one month. Also, there was some cases, where employee will leave the company in the middle of the month and if the employer doesn’t cut the tax then that amount have to pay by the employer to the government as a tax.

How can you save your money from getting deducted as TDS?

As, in TDS there are certain cases, where the taxes are exempted for the employee. Such as the HRA, medical, travel allowance, children education allowance, etc. By submitting the receipt of these payments to your employer you can deduct that amount from your TDS tax. Many of the employees don’t know the tax, which are exempted and which they can pay.

Usually employees pay the tax for every entity, irrespective of the exemption they have, there are many things which are tax exempt. And you can save that money from your salary, it just needs your some time to know the things that are included in the sections 80C, 80D, 80G, 80DD and 80C &80U. Its became very beneficial for you which saves a lot of money from your salary.

How TDS or Form 16 will help you to get the loan?

After TDS deduction employer will provide you with the form 16 certification that will help you submit the lender that will act as the income certification from your employer side. For calculating the eligibility of your loan repayment the first and foremost thing the employers look at is your income and usually lender don’t consider the payslips, which you get from your employer. Because you can do manipulation in that for getting the high amount of loan. But the Form 16 is from the government side and it will act as the genuine income certificate. You can get low interest rates for loan, if you have good credit history.