Launched in June 2015, Pradhan Mantri Awas Yojana (PMAY) aims to promote the concept of ‘housing for all’. Brought to action by the government of India, this scheme proposes to build houses by 2022 for the urban and rural population of India. This policy is meant to promote affordable housing for those belonging to economically weaker sections of society and low-income groups. It focuses on slum rehabilitation, construction of better houses, renovating houses with basic needs and facilities. The PMAY scheme promotes the use of eco-friendly building material used for the construction of homes.

This initiative aims at developing India’s housing sector in many ways, such that the entire population can benefit from home loan interest rates supported by the scheme. The housing loan EMI calculator gives you a fair understanding of the ratio of the principal amount to the interest due, based on the effect of the tenure and interest rates. For PMAY, apply online and avail all the benefits this scheme has to offer. 

The PMAY subsidy  scheme is divided into two major sections Pradhan Mantri Awas Yojana-Urban (PMAY-U) and Pradhan Mantri Awas Yojana-Gramin (PMAY-G).PMAY-U is applicable to the urban population while PMAY-G is applicable to the rural population. The PMAY-U consists of three schemes, namely: EWS (Economically Weaker Sections)/LIG (Low Income Group), CLSS (MIG-I) and CLSS (MIG-II). The GST council has recommended concession in the GST rates for homes purchased under the Credit Linked Subsidy Scheme (CLSS). For under-construction homes that form a part of CLSS will now be charged with GST at 8 percent instead of 12 percent, a deduction of 4 percent. However, people who are not eligible for PMAY CLSS will continue to pay higher GST.

The concessional rate of GST of 12 percent will be applicable for houses constructed or acquired under the PMAY CLSS for Economically Weaker Sections (EWS) / Lower Income Group (LIG) /Middle-Income Group-1 / Middle-Income Group-2 under the Housing for All Mission/Pradhan Mantri Awas Yojana (PMAY Urban). The interest subsidy in CLSS would be provided on housing loans  taken by eligible urban poor (EWS/LIG/ MIG-I/ MIGII) for accession or construction of the house.

Under CLSS, the houses attract an effective GST rate of 18 percent. Moreover, the concessional rate of 12 percent is applicable only on houses constructed under the other three components of the Housing for All Mission/Pradhan Mantri Awas Yojana (Urban):

1) Redevelopment of slums using the land as a resource component

2) Affordable housing in partnership with other entities

3) Beneficiary-led individual house construction/enhancement

With the compulsory directive in place regarding the property, there has been a significant increase in woman home buyers in India over the last few years. Apart from this, the affordability of the PMAY schemes has also been intensified with GST being brought down from 12% to 8% for home buyers. So, check your eligibility and get a home loan sanction to avail the benefits of the Pradhan Mantri Awas Yojana.

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