A great initiative undertaken by the India Government in 2015 is the Pradhan Mantri Awas Yojana or PMAY. It aims to provide affordable housing to the middle and lower-income groups by 2022.
PMAY has two components: Pradhan Mantri Awas Yojana Rural or Gramin (PMAY R/G) and Pradhan Mantri Awas Yojana Urban (PMAY – U).
Salient features of PMAY
Many features make PMAY a robust scheme for the Indian citizen. These include:
- Beneficiaries can avail a subsidised home loan interest rate between 3% to 6.5% per annum for a term of 20 years. Applicants can do this through PMAY’s Credit Linked Subsidy Scheme or CLSS.
- If you are a senior citizen or differently-abled, the scheme will give you preference for ground floor home allocation. Keeping the preservation of the environment in mind, only sustainable and eco-friendly technologies will be used in the construction of these homes.
- PMAY also offers a tax benefit to anyone who applies for a home loan. Under the scheme, individuals applying for the house loan will pay a reduced GST of up to 8% as opposed to the standardised 12%. This includes properties under construction. The reduced GST also provides an incentive for the builders and developers constructing the properties.
Who can benefit from PMAY?
Since the PMAY aims to provide affordable housing to the Economically Weaker Section (EWS), the home loan eligibility under the scheme is restricted to low-income groups.
Families belonging to the middle and lower-income group can apply for a house loan under PMAY. This means that if your family’s yearly income is 18 lakhs or lower, you are eligible to apply for the loan under this scheme. Individuals from the scheduled caste and scheduled tribe and women from any caste or tribe can apply for a subsidised house loan regardless of their income group.
However, regardless of meeting the income criteria, if the applicant or their family member owns a stable structured or pucca home, they cannot be eligible for the loan.
How to apply for PMAY?
To apply for a house loan under PMAY, the candidate must first submit a proof of income in an affidavit form. Once their income has been verified, candidates can visit any sanctioned lender offering a home loan under the scheme.
Using a home loan EMI calculator, they can select a comfortable term and EMI under the subsidised interest rate and submit the necessary documents. Once the documents are verified, their loan will be sanctioned.
Latest Update on PMAY in 2021
According to Business Today, here are some of the updates on the progress of PMAY in 2021.
- Since its inception in 2015, a total of 1.08 crore houses have been sanctioned under PMAY. Out of these 38.45 lakh houses have been completed.
- The Centre’s sanctioned budget for assistance to PMAY was Rs. 1.72 lakh crore out of which 0.76 lakh crore has been released.
- The finance minister increased the outlay of the PMAY-U scheme, in view of the COVID-19 pandemic, by Rs. 18,000 crores, which resulted in creating 78 lakh additional jobs and increased consumption of steel and cement. The finance minister assured that this will, in turn, help the country’s economy.
Parting thoughts
PMAY is a great way for middle and lower-income groups to achieve their dream of living in their own homes. If you qualify for a subsidised home loan, take advantage of this opportunity and apply for housing finance right away.
