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The Ministry of Housing and Urban Poverty Alleviation has set a route map and has also made clear the eligibility criteria a prospective applicant need to meet. Also has enlisted the help of some leading banks in the country to provide loans for construction under PMAY. The banks offer loans at a comparatively lower rate as government pays the rest on behalf of the applicant. This model of subsidized loans help more economically weaker people to build a house. Here’s what it looks like:
Section | Annual Family Income | Maximum carpet area |
EWS | Rs.3 lakh | 60 square meters (645.83 square feet) |
LIG | Rs.6 lakh | 60 square meters (645.83 square feet) |
MIG1 | Rs.6 lakh to Rs.12 lakh | 160 square meters (1722.33 square feet) |
MIG2 | Rs.12 lakh to Rs.18 lakh | 200 square meters (2152.78 square feet) |
In order to avail a house or financial reinforcement from the government, every applicant needs to meet the eligibility criteria set by the PMAY committee. Prospective applicants have been branched into six distinct groups
Besides this, there is a basic requirement an applicant has to meet. For instance, if the beneficiary is a family, it must comprise of a husband, wife, and unmarried children. Also, no person from the family should own a house in their name.
Particulars | MIG 1 | MIG 2 |
House Hold Income | Rs.12 lakh p.a. | Rs.18 lakh p.a. |
Maximum Loan Tenure | 20 years p.a. | 20 years p.a. |
Interest subsidy | 4% p.a. | 3% p.a. |
Eligible amount of loan for interest subsidy under CLSS | Rs.9 lakh | Rs.12 lakh |
Maximum interest subsidy | Rs.2.35 lakh | Rs.2.3 lakh |
Rate of discount for NPV (Net Present Value) | 9% | 9% |
Dwelling unit max carpet area | 90 sq.mt | 110 sq.mt |
Monthly EMI (8.65%) with interest subsidy | Rs.5,834 | Rs.8,059 |
Monthly EMI (8.65%) without interest subsidy | Rs.7,894 | Rs.10,528 |
Amount of loan | Rs.3 lakh | Rs.6 lakh | Rs.10 lakh |
Subsidy Amount | Rs.3 lakh | Rs.6 lakh | Rs.6 lakh |
Balance loan | Rs.1,66,360 | Rs.3,32,720 | Rs.7,32,720 |
Interest subsidy | Rs.1,33,640 | Rs.2,67,280 | Rs.2,67,280 |
Initial EMI | Rs.2,895 | Rs.5,790 | Rs.9,650 |
Reduced EMI after subsidy credit | Rs.1,605 | Rs.3,211 | Rs.7,071 |
Savings on a monthly basis | Rs.1,290 | Rs.2,579 | Rs.2,579 |
Savings on an annual basis | Rs.15,480 | Rs.30,948 | Rs.30,948 |
PMAY, while being a populist scheme, is also a progressive one as it helps millions of urban poor in the country own a house, they can call their own. This scheme, upon completion, will serve as a great model for other developing countries to follow.
Union Finance Minister Nirmala Sitharaman on Thursday announced that the government will launch a rental housing scheme under the PM Awas Yojana for the urban poor. The scheme will be undertaken under PPP mode through concessionaire arrangement. The move is aimed to incentivized building affordable housing into rental housing as well as converting empty government land into rental housing settlements. The move is aimed at providing ease of living. In her address today, Sitharaman added that the government will continue to provide migrant labourers 5 kgs of free food grains per person.
The Pradhan Mantri Awas Yojana has already helped thousands of people in India fulfil their dreams of owning a house. To make things even better for the prospective homebuyers who are looking to avail a home loan through this scheme, the government has slashed the GST from 12% to 8%.
Any person who is buying a home for the first time will have to pay an 8% GST, provided he/she takes a home loan through the Credit Linked Subsidy Scheme (CLSS) under the PMAY.
There are certain eligibility criteria to be fulfilled in order to successfully avail a home loan through the CLSS. For instance, the applicant’s family income should not be above Rs.18 lakh per annum and the maximum carpet area (area enclosed within the walls) eligible for the subsidy is 150 sqm. The tax benefit will be available for the low-cost housing projects as well. Anyone who does not meet the aforementioned requirements will have to pay 12% GST.
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