Since the launch of the PMAY or Pradhan Mantri Awas Yojana in 2015, the scheme has benefitted millions of aspiring homeowners in India. Under the scheme, the government of India aims to build more than two crore new affordable housing units across India and provide a permanent residence to all Indian citizens by March 2022.
With the launch of the scheme, the government aims to eradicate the slums around India and upgrade the living standards of the poor. While the PMAY is primarily for the benefit of the poor and the underprivileged, it also aims to help all sections of the society.
Apart from building new homes across different cities, under the PMAY, the government also wants to encourage the citizens to become homeowners. One of the critical and integral components of the Pradhan Mantri Awas Yojana is the CLSS (Credit Linked Subsidy Scheme). Under this scheme, the government provides financial aid by offering interest subsidies on the home loans.
The primary objective of this scheme is to help the middle class become homeowners and make home buying affordable for all. To ensure that every potential beneficiary gets maximum subsidy benefit, the government has divided the interest subsidy based on the income category of the applicant.
Let us know more about how the CLSS scheme and how it works.
Based on the annual household income, the following four categories can avail the CLSS benefits.
- EWS (Economically Weaker Section) – This group includes individuals with an annual household income of not more than Rs. 3 lakhs.
- LIG (Lower Income Group) – This group includes individuals with an annual income between Rs. 3 lakhs and Rs. 6 lakhs.
- MIG I (Middle Income Group) – This group includes individuals with an annual income between Rs. 6 lakhs and Rs. 12 lakhs.
- MIG II (Middle Income Group) – This group includes individuals with an annual income between Rs. 12 lakhs and Rs. 18 lakhs.
The Credit Linked Subsidy Scheme allows the eligible beneficiaries to get a concession on the hoe loan interest rate up to 6.5% on the loan amount, depending on the income group they belong to. The subsidy amount is calculated over the entire loan term and the maximum limit any one can get is Rs. 2.67 lakhs.
The interest subsidy offered is directly deducted from the outstanding loan amount. And as the principal amount is reduced, your EMI automatically reduces. This makes the repayment more affordable for all.
To get the subsidy benefits, you must furbish income proof to the lender and comply with the documentation process. You must submit the property-related documents, including title of the property you want to buy, buyer agreement, etc. Once the lender verifies all the details, they send your subsidy request to the concerned authorities for further processing. And, once the authorities release the subsidy amount, they credit the same to your loan account and adjust the EMI accordingly.
Now that you know how the CLSS subsidy works, it would help to know the eligibility criteria.
To qualify for the CLSS benefits, you must meet the following requirements.
- You or any of your family members should not own any pucca house anywhere in India.
- You or any of your family members should not have received financial aid under any other central or state government housing scheme.
- You must necessarily include a female member of the family as the co-owner of the property, irrespective of whether they contribute to the loan repayment or not.
- The property you want to buy must be in any one of the towns or areas listed in the 2011 census.
Thus, the CLSS scheme is a boon for all. If you are looking to purchase a new home, take advantage of the interest subsidy benefit under CLSS and make your dream come true.