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  • Pradhan Mantri Awas Yojana Eligibility

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    Pradhan Mantri Awas Yojana Eligibility

    Despite having made massive leaps in development over the last decade or so, India still has a large number of people living in abject poverty, most of whom don’t have a house to call their own. The Indian government took up a serious step towards abolishing homelessness with the introduction of Pradhan Mantri Awas Yojana. This project, which was previously known as Housing For All, will provide a roof to over 20 million urban poor people by the year 2022. In order to do so, 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.

    Objectives of the Pradhan Mantri Awas Yojana (PMAY)

    The Pradhan Mantri Awas Yojana was initiated back in 2015 with a view to serve a number of purposes. These are:

    • To ensure that the poorer sections of urban India can live under a roof of their own.
    • To provide financial support to people who can’t bear the entire cost of building a residential property.
    • To offer houses to the Economically Weaker Sections (EWS) of the society.
    • To bring both public and private sector together in a bid to improve the fate of the nation’s urban poor populace.

    Recent Changes Made Under The PMAY:

    GST on Affordable Homes Slashed to 8%

    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.

    Pradhan Mantri Awas Yojana Eligibility Criteria

    In order to avail a house or financial reinforcements 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

    Section Eligibility Details
    Economically Weaker Section (EWS) People who earn an annual household income less than Rs.3 lakh come under the EWS category. However, an applicant claiming to be from EWS needs to provide relevant proof to the government to ascertain their claims.
    Light Income Group (LIG) People that fall under LIG category usually have an annual household income ranging between Rs.3 lakh to 6 lakh. Again, to be eligible for consideration, they need to provide sufficient proof of their economic standing.
    Medium Income Group (MIG1) Those who earn an annual household income below Rs.12 lakh fall under the MIG1 category. These people can avail loans of up to Rs.9 lakh for the construction of a residence.
    Medium Income Group (MIG2) Individuals earning an annual household income between Rs.12 to Rs.18 lakh will fall under MIG2 of the PMAY scheme. These people can avail loans of up to Rs.12 lakh.
    Minorities People hailing from minority groups like SC/ST/OBC will fall under minorities. To be considered under the PMAY scheme, these people need to meet to provide relevant caste and income certificates.
    Women Women belonging to EWS/LIG categories will be considered if they apply under the PMAY scheme.

    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.

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    Pradhan Mantri Awas Yojana Home Loan Scheme for LIG/EWS Category

    For loan amount of Rs.3 lakh:

    Amount of loan Rs.3 lakh
    Loan amount eligible for the subsidy Rs.3 lakh
    Balance loan Rs.1,66,360.00
    Interest subsidy Rs.1,33,640.00
    Initial EMI Rs.2,895
    Reduced EMI after subsidy credit Rs.1,605
    Savings on a monthly basis Rs.1,290
    Savings on an annual basis Rs.15,480

    For loan amount of Rs.6 lakh:

    Amount of loan Rs.6 lakh
    Loan amount eligible for the subsidy Rs.6 lakh
    Balance loan Rs.3,32,720.00
    Interest subsidy Rs.2,67,280.00
    Initial EMI Rs.5,790
    Reduced EMI after subsidy credit Rs.3,211
    Savings on a monthly basis Rs.2,579
    Savings on an annual basis Rs.30,948

    For loan amount of Rs.10 lakh:

    Amount of loan Rs.10 lakh
    Loan amount eligible for the subsidy Rs.6 lakh
    Balance loan Rs.7,32,720.00
    Interest subsidy Rs.2,67,280.00
    Initial EMI Rs.9,650
    Reduced EMI after subsidy credit Rs.7,071
    Savings on a monthly basis Rs.2,579
    Savings on an annual basis Rs.30,948

    Pradhan Mantri Awas Yojana Loan Scheme for MIG – 1

    Income of the household per year Rs.12 lakh
    Maximum tenure of the loan 20 years
    Interest subsidy per year 4%
    Eligible amount of loan for interest subsidy under CLSS (Credit Linked Subsidy Scheme) for MIG Rs.9 lakh
    Maximum interest subsidy Rs.2.35 lakh
    Rate of discount for NPV (Net Present Value) calculation of the interest subsidy 9%
    Dwelling unit max carpet area 90 sq.mt
    Monthly EMI (8.65%) with interest subsidy Rs.5,834
    Monthly EMI (8.65%) without interest subsidy Rs.7,894

    Pradhan Mantri Awas Yojana Loan Scheme for MIG – 2

    Income of the household per year Rs.18 lakh
    Maximum tenure of the loan 20 years
    Interest subsidy per year 3%
    Eligible amount of loan for interest subsidy under CLSS (Credit Linked Subsidy Scheme) for MIG Rs.12 lakh
    Maximum interest subsidy Rs.2.3 lakh
    Rate of discount for NPV (Net Present Value) calculation of the interest subsidy 9%
    Dwelling unit max carpet area 110 sq.mt
    Monthly EMI (8.65%) with interest subsidy Rs.8,059
    Monthly EMI (8.65%) without interest subsidy Rs.10,528

    PMAY Eligibility Criteria for Getting Subsidy

    The Ministry of Housing and Urban Poverty Alleviation 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.

    HDFC Bank has partnered with the government to offer loans to people who have applied for PMAY scheme. Here’s what is looks like:

    • The applicant’s family must not own a house in any part of the country.
    • In the case of a married couple, either a single or a joint ownership deal is allowed, and both options will receive just one subsidy.
    • The applicant’s family must not have availed the benefit of any housing-related schemes set up by the Government of India.

    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.

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