India is on its way to becoming a superpower in the coming decades. However, that doesn’t help the fact that a large number of people residing in the country are either homeless or living in dilapidated small houses, leading a poor quality of life. Thankfully for such people, a central government pilot project citing the need for ‘Housing for All by 2022’ — Pradhan MantriAwasYojana or the PMAY is launched.
The scheme is aimed at offering the first permanent or pucca house to citizens belonging to the urban as well as rural population by offering them the much needed financial aid. This aid is offered in the form of the Credit-Linked Subsidy Scheme (CLSS), wherein the beneficiaries can enjoy subsidized interest rates on Home Loans. The scheme aims at aiding the construction of over 2 crore houses by the year 2022. Under this scheme, the Central Government and the State Government have agreed to bear the costs in the ratio of 60:40.
Under the PMAY, people belonging to the below-mentioned sections of the society will be able to reap the benefits –
- Economically Weaker Section (EWS)– This segment includes individuals with a net household income lower than Rs. 3 lakh per annum. In this category, the carpet area of the proposed house should not exceed 30 square metres (323 square feet).
- Lower Income Group (LIG)– This segment includes individuals with a net household income ranging from Rs. 3 lakh to Rs. 6 lakh per annum. In this category, the carpet area of the proposed house should not exceed60 square metre (645 square feet).
- Middle Income Group – I (MIG- I) – This segment includes individuals with a net household income ranging from Rs. 6 lakh to Rs. 12 lakh per annum. In this category, the carpet area of the proposed house should not exceed160 square metres or 1,820 square feet.
- Middle Income Group – II (MIG – II)– This segment includes individuals with a net household income ranging from Rs. 12 lakh to Rs. 18 lakh per annum. In this category, the carpet area of the proposed house should not exceed200 square metres or 2,100 square feet.
To gain a better understanding of the size of the house, it is imperative for you to know that the Carpet Area (as defined under PMAY), refers to the area enclosed within the walls of the house. Hence, this area excludes the outer walls, as well as a balcony and other common areas of the residential property such as the porch or entrance.
Credit Linked Subsidy Scheme
As mentioned earlier, the most imperative benefit of PMAY is the fact that it offers subsidized interest rates to qualifying Home Loan borrowers. An integral aspect of this scheme is that the subsidy is paid upfront, which effectively reduces the principal amount, thereby reducing the EMI outgo.
In this scenario,
- Borrowers belonging EWS segment are eligible to avail an interest subsidy of 6.5%, wherein the maximum loan amount is Rs. 6 lakh.
- Borrowers qualifying under the LIG segment are also eligible to avail an interest subsidy of 6.5%, subject to a maximum loan amount of Rs. 6 lakh.
- Borrowers belonging to MIG I segment can avail a subsidy of 4% on a maximum loan amount of Rs. 9 lakh.
- Borrowers qualifying under the MIG II segment can avail an interest subsidy worth 3% for a maximum loan amount of Rs. 12 lakh.
You must note that the subsidy can only be availed if the loan is taken for a maximum of 20 years.
PMAY Subsidy Calculator
Due to numerous categories under the scheme, it may become a little tricky to calculate the Pradhan Mantri Awas Yojana Subsidy amount. Thankfully, you can now make use of the Subsidy Calculator to know about the exact amount of financial aid that you are entitled to. All you need to do is type in the following details –
- Your annual household income.
- The Home Loan amount that you wish to apply for this being done, Pradhan Mantri Awas Yojana Subsidy calculator will help you decipher –
- Your subsidy category
- Your subsidy amount
For instance, you input your annual Household Income as Rs. 10 lakh, and are willing to take an SBI Home Loan of Rs. 12 lakh for a period of 20 years – the PMAY Subsidy Calculator will let you know that you belong to the MIG-I category, and are eligible for a subsidy of Rs. 2,35,068.
Since you will receive the subsidy upfront, your effective principal amount will reduce from Rs. 12 lakh to Rs. 9.65 lakh. Hence, your EMI for the loan amount, considering the standard interest rate of 9%, will reduce from Rs. 10,797 to Rs. 8,682 per month.
In this case, it is crucial for you to understand and adhere to the below-mentioned conditions –
- This should be the first pucca house that you are purchasing/ constructing, i.e., you or any member of your family should not own any pucca house in any part of the country. For this purpose, a family construes of a Husband, wife, and their unmarried sons and daughters.
- Moreover, if you belong to the EWS or the LIG segment, it is mandatory that the property is purchased/co-purchased under the name of the adult woman of the household.
This is all you need to know about Pradhan Mantri Awas Yojana Subsidy. So, wait no more if you to tap the most of this incredibly beneficial housing scheme!