Pradhan Mantri Awas Yojana (PMAY) is a credit-linked subsidy scheme by the Government of India to facilitate access to affordable housing for the low and moderate-income residents of the country.
The PMAY scheme provides an interest subsidy of up to 6.5% on home loans through four CLSS categories – EWS, LIG, MIG I, and MIG II. The scheme also covers slum rehabilitation, affordable housing in partnership, and beneficiary-led individual house construction or enhancement.
If you are looking for a home loan that can help you save tax and buy your dream home at a lower cost, you should consider applying for the PMAY scheme. In this blog, we will explain what is PMAY scheme, who is eligible, and how to apply for it.
What is PMAY scheme?
PMAY scheme is a government initiative that aims to provide housing for all by 2022. The scheme has two components – PMAY-Urban (PMAY-U) and PMAY-Gramin (PMAY-G). PMAY-U covers the urban areas and PMAY-G covers the rural areas.
The main feature of the PMAY scheme is the credit-linked subsidy scheme (CLSS), which offers an interest subsidy on home loans taken by eligible beneficiaries. The subsidy ranges from 3% to 6.5% depending on the income category and loan amount. The subsidy is credited upfront to the loan account of the beneficiary, reducing the effective loan amount and EMI.
The PMAY scheme also supports other modes of affordable housing, such as:
- Slum rehabilitation of eligible slum dwellers with participation of private developers using land as a resource.
- Affordable housing in partnership with public and private sectors, where central assistance is provided per EWS house in projects where 35% of houses are for EWSs.
- Beneficiary-led individual house construction or enhancement, where financial assistance is provided to individuals of EWS category who wish to build or improve their own houses.
Who is eligible for PMAY scheme?
To be eligible for the PMAY scheme, you need to meet the following criteria:
- You or your family members must not be owning a pucca house in any part of the country.
- Your family must comprise of husband/wife and unmarried children.
- The town/city in which you reside must be covered under the scheme.
- You must not have previously availed the benefits of any housing-related schemes set up by the Government of India.
Additionally, you need to belong to one of the following income categories:
- Economically Weaker Section (EWS): households with annual income up to Rs. 3 lakh.
- Low Income Group (LIG): households with annual income between Rs. 3 lakh and Rs. 6 lakh.
- Middle Income Group-1 (MIG-1): households with annual income between Rs. 6 lakh and Rs. 12 lakh.
- Middle Income Group-2 (MIG-2): households with annual income between Rs. 12 lakh and Rs. 18 lakh.
The maximum loan amount and carpet area for each category are as follows:
How to apply for PMAY scheme?
To apply for the PMAY scheme, you need to follow these steps:
- Choose a home loan provider that is registered under the PMAY scheme. You can compare different home loan products and services offered by various financial institutions online.
- Complete your KYC process by submitting your PAN card, Aadhaar card, address proof, bank details, etc., and verifying them through OTP or biometric authentication.
- Fill up the online application form for the PMAY scheme on the official website of the home loan provider or the PMAY portal. You need to provide your personal, income, and property details, along with your Aadhaar number and mobile number.
- Select the CLSS category that you belong to and the loan amount that you require. You can also use online tools like HDFC Bank’s Home Loan EMI Calculator to estimate your EMI and interest subsidy.
- Submit the application form and upload the required documents, such as income proof, property papers, etc. You will receive a confirmation email or SMS once your application is submitted.
- Track your application status online through the home loan provider’s website or app. You can also download your account statement or annual tax certificate from the website or app.
- Once your application is approved, the interest subsidy will be credited to your loan account, reducing your loan amount and EMI. You can then start repaying your home loan as per the agreed terms and conditions.
Conclusion
PMAY scheme is a great opportunity for the urban poor to own their dream home at a lower cost and save tax. The scheme offers an interest subsidy of up to 6.5% on home loans for various income categories. The scheme also covers other modes of affordable housing, such as slum rehabilitation, affordable housing in partnership, and beneficiary-led individual house construction or enhancement. To avail the benefits of the PMAY scheme, you need to meet the eligibility criteria and apply online through a registered home loan provider or the PMAY portal.