Is IT return proof mandatory for self-employed borrowers?

Many self-employed borrowers worry about whether an IT return is compulsory for a used car loan. In most cases, lenders ask for it because it’s one of the few clear ways to understand your income over a year, not just a month or two. You may experience this especially when the loan amount is on the higher side.

When you apply, they usually ask for IT returns for the last two or three years. Those forms tell them approximately how much you earn, what you spend on the business, and whether things are stable. Lenders may also read your bank statements to analyse your debt-to-income ratio. They check if money is coming in steadily and if an EMI will comfortably fit in.

If you don’t have proper IT returns, it doesn’t automatically lead to a rejection, but it could narrow options. Some NBFCs that regularly work with shop owners, traders or freelancers may look at other signs of income recent invoices, simple profit-and-loss statements, UPI or bank credits over a few months, basic business registration papers.

At this stage, the more organised your records are, the easier the conversation becomes. Even small steps like filing returns on time and keeping business money separate from personal spends make a clear difference over the next few years.