In a milestone effort to make home ownership affordable to people from every income bracket, the government has launched the Pradhan Mantri Awas Yojana (PMAY). As a part of this initiative, people who fall within the lower and middle-income groups are eligible for subsidies on the interest of their home loans. This is a much-needed move to help every Indian experience the joy of being a homeowner, regardless of their economic background. Knowing about the key features of this scheme is essential for every homeowner while applying for a home loan . Since this ambitious scheme covers the whole of India, it has been divided into two main sections for better implementation.
With the focus on urban cities and towns, the PMAY Urban scheme targets residents of these areas who live in temporary houses. Any person who falls under the classifications of Economically Weaker Sections (EWS), Lower Income Groups and Middle Income Groups (MIG) can benefit from this initiative. Within cities and towns, a large portion of the LIG & MIG section live in rented houses as buying a home is out of their budget.
With this scheme people from EWS, LIG and MIG can realise their dream of buying their own home with lower financial burden.
Under the PMAY Gramin scheme, people who live in rural areas of India can apply for subsidies on their home loan. People who need to take out a loan for renovation of their existing homes can also make use of this scheme. Under the PMAY Gramin initiative, people who come within the Economically Weaker Section (EWS), Lower Income Group (LIG) and Middle Income Group (MIG) can utilize this scheme.
Income Categories Defined in the PMAY Scheme
Individuals who fall within the following income groups can apply for subsidies as part of the PMAY initiative:
- EWS: Individuals with an annual income of below Rs. 3 lakhs are categorized as the Economically Weaker Section.
- LIG: Individuals with an income between Rs. 3-6 lakhs are grouped under this section.
- MIG 1: Individuals under this group earn an annual income of Rs 6-12 lakhs.
- MIG 2: Individuals within this subsection earn an annual income that falls between Rs. 12-18 lakhs.
Features of the CLSS Scheme
The Credit Linked Subsidy Scheme (CLSS) is a subsection of the PMAY scheme under which the subsidies guaranteed by the initiative fall. Through CLSS, individuals who are eligible for the scheme can make use of special subsidies on the interest payable for their home loan. Individuals can also utilize this scheme on loans taken for expansion or renovation of their current houses.
Eligibility for CLSS
The following criteria are essential for individuals to be eligible for the scheme:
- Individuals and their immediate family cannot own residential property.
- Spouses will be considered for a single subsidy taken under either of their names or both of them.
- The beneficiary cannot have a history of applying for a government housing loan scheme.
- The ‘family’ mentioned within the loan comprises of both spouses along with unmarried children they have, if any.
- Under MIG section, any individual receiving an independent income will be considered as a separate family unit, even if they are unmarried.
Other Features of the PMAY Scheme
The following are the other features that are a part of the PMAY initiative:
- Loans either processed, sanctioned or applied on or after January 1 2017 can be eligible for this scheme.
- Women will be given priority as part of this scheme. Widows, spinsters, SC/ST groups as well as transgenders will also be given preference.
- The total interest subsidy will be paid to beneficiaries in one go.
- The tenure of the loan can be 20 years or a time period opted by the beneficiary.
The PMAY and CLSS schemes are a boon for India’s expanding middle-income sections who are looking to invest in a home of their own. If these initiatives have given you reasons to not delay a property investment in 2018, visit Lancor for beautiful homes in great localities.