With the aim to provide housing for all, the Government of India launched the Pradhan Mantri Awas Yojana (PMAY) in 2015. Under PMAY, the Government plans to build more than 20 million affordable houses by 31st March 2021. Credit Linked Subsidy Scheme (CLSS) is an important component of PMAY where the Government provides home loan interest rate subsidy to eligible borrowers opting for loans under PMAY. Read on to know about the different aspects of CLSS and how you can avail it.
CLSS Eligibility Criteria
To avail CLSS benefits under PMAY, you:
- Need to be a first-time home buyer, who hasn’t availed assistance under any other housing scheme from the Government of India
- Must have household income between Rs. 6-18 lakh
It is essential to note that the quantum of interest subsidy received varies across categories. There are three broad categories under PMAY, according to one’s annual income. They are:
- Economically Weaker Section (EWS) with an annual income of up to Rs. 3 lakh
- Lower Income Group (LIG) with an annual income between Rs. 3-6 lakh
- Middle Income Group (MIG) with an annual income between Rs. 6-18 lakh
MIG is further divided into two subgroups – MIG I and MIG II. Those with an annual income between Rs. 6-12 lakh belong to MIG I. On the other hand, individuals with yearly income between Rs. 12-18 lakh belong to MIG II.
Other Aspects of CLSS
The interest subsidy under CLSS ranges between 3 % to 6.5%. The table below highlights the different aspects of CLSS for the above-mentioned categories of borrowers availing home loans under PM Awas Yojana:
|
Particulars
|
ECW
|
LIG
|
MIG I
|
MIG II
|
|
Annual
household income limit
|
Rs. 3
lakh
|
Rs. 3-6 lakh
|
Rs. 6- 12
lakh
|
Rs. 12-18
lakh
|
|
Maximum
carpet area
|
30 sq
meter
|
60 sq
meter
|
160 sq
meter
|
200 sq
meter
|
|
Interest
subsidy
|
6.5%
|
6.5%
|
4%
|
3%
|
|
Loan
limit for interest subsidy
|
Rs. 6
lakh
|
Rs. 6
lakh
|
Rs. 9
lakh
|
Rs. 12
lakh
|
|
Subsidy
period (Loan tenor)
|
20 years
|
20 years
|
20 years
|
20 years
|
How can You Avail the Subsidy?
Availing interest subsidy under CLSS is pretty easy. All you need to do is:
- Apply for a home loan from a prime lending institution or PLI, seeking subsidy
- The lending institute gauges your eligibility and if you match the eligibility criteria, your application is forwarded to the Central Nodal Agency (CNA)
- Once CNA approves your application, the subsidy amount is disbursed to the lender
- The lender then credits this amount into your account
- The subsidy received reduces the loan amount, which in turn reduces the EMI
Extension of CLSS for MIG
In a recent move, the Government has extended the validity of CLSS for MIG by another year, up to 31st March 2020. While earlier the date was 31st March 2019, considering the positive response among homebuyers, particularly the MIG, the Government took the decision to extend the validity of CLSS. Experts believe that the move will further push up the demand for affordable housing among this category of homebuyers, thus boosting the sector as a whole.
How CLSS can Benefit You?
The interest saved through CLSS, if utilised properly, can go a long way in compounding your wealth in the long run. The money if invested in prudent financial avenues can help you accumulate decent corpus for various life goals. It’s estimated that you can save a maximum up to Rs. 2.35 lakh on interest paid on home loans in India through this scheme. NBFCs offer home loans up to Rs. 5 crore under PMAY at affordable interest rates. Minimal documentation and easy eligibility criteria are the hallmarks of this offering.
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