What is the Pradhan Mantri Awas Yojana (PMAY) subsidy

Many Indians dream of owning a home. The Pradhan Mantri Awas Yojana (PMAY) is an initiative launched by the Indian government to make this dream a reality for millions of people. PMAY offers financial assistance and subsidies on home loans to eligible individuals. 

In this article, we will dive deep into what is PMAY or what is Pradhan Mantri Awas Yojana, who is eligible for it, and how you can apply for it.

Understanding the Pradhan Mantri Awas Yojana subsidy

PMAY or Pradhan Mantri Awas Yojana scheme aims to provide affordable housing options to economically weaker sections (EWS), lower-income groups (LIG), and middle-income groups (MIG) in both urban and rural areas. The scheme has two components: PMAY-Gramin (for rural areas) and PMAY-Urban (for urban areas).Under the Awas Yojana subsidy, eligible beneficiaries can receive home loan interest rate subsidies on home loans, direct financial assistance for building houses, in-situ rehabilitation of slum dwellers, and credit-linked subsidies for the middle-income group.

Pradhan Mantri Awas Yojana eligibility

Following are the Pradhan Mantri Awas Yojana eligibility criteria that applicants must meet:

1. 1. Annual income: The scheme is open to families with an annual income of up to Rs. 18 lakhs.

2. House ownership: Applicants must not own a permanent house in any part of India in their name or the name of any family member.

3. Beneficiary categories: The PMAY scheme has different categories based on income levels:

• Economically Weaker Section (EWS): Up to Rs. 3 lakh per year
• Lower Income Group (LIG): Rs. 3 lakh to Rs. 6 lakh per year
• Middle Income Group I (MIG I): Rs. 6 lakh to Rs. 12 lakh per year
• Middle Income Group II (MIG II): Rs. 12 lakh to Rs. 18 lakh per year

4. Age criteria: The head of the household must be between 25 and 70 years of age.

5. No previous housing benefits: Applicants should not have received any other housing benefits from a government scheme.

Calculating Pradhan Mantri Awas Yojana subsidy

Now that you know who is eligible for the PMAY subsidy, let's understand how the subsidy amount is calculated. The home loan interest rate subsidy rates vary based on the beneficiary category:

• EWS and LIG beneficiaries are eligible for an interest subsidy of 6.50% p.a.
• MIG I beneficiaries can avail an interest subsidy of 4.00% p.a., while MIG II beneficiaries can avail a subsidy of 3.00% p.a.

To calculate the subsidy amount, consider this example:

Suppose you fall under the MIG I category and have taken a home loan of ₹10 lakhs at an interest rate of 8.50% p.a., with a tenure of 20 years. The maximum loan eligible for subsidy is ₹9 lakhs.

First, calculate the home loan interest rate payable without the subsidy:

Interest Payable = Principal Amount × Interest Rate × Loan Tenure

Interest Payable = ₹10,00,000 × 8.50% × 20

Interest Payable = ₹17,00,000

Next, calculate the interest subsidy amount:

Subsidy Amount = Maximum Loan for Subsidy × Interest Subsidy Rate

Subsidy Amount = ₹9,00,000 × 4.00%

Subsidy Amount = ₹36,000The subsidy amount will be credited to your home loan account, reducing your overall interest burden. You can use a home loan calculator to calculate the home loan interest rate.

Applying for PMAY Subsidy

To apply for the PMAY subsidy, follow these steps:

1. Visit the official PMAY website and click on the "Citizen Assessment" option.
2. Enter your Aadhaar number and fill out the application form with all necessary information.
3. Recheck the information and obtain a unique application number after saving the form.
4. Download the filled-in application form and submit it with any required documents.
5. Submit the form at a nearby Common Service Center (CSC) or financial institution offering PMAY.

Conclusion

The Pradhan Mantri Awas Yojana (PMAY) subsidy is a government initiative aimed at providing affordable housing options to all income groups in India. This subsidy makes owning a home more affordable and achievable.Understanding your home loan affordability is crucial before applying for any housing scheme like PMAY. Use a reliable home loan calculator to calculate your EMIs based on different interest rates and tenure options. Mahindra Finance offers various home loan options that align with schemes like PMAY and provide flexible repayment terms to suit your needs.

FAQs

Q: What is PMAY?

Pradhan Mantri Awas Yojana (PMAY) is a government housing scheme that offers financial assistance and subsidies on home loans to eligible individuals.

Q: What are the eligibility criteria for PMAY subsidy?

To be eligible for PMAY subsidy, you must meet income criteria, not own a permanent house, and fall within the specified beneficiary categories.

Q: Can I avail of the PMAY subsidy if I already own a home?

No, the PMAY subsidy is only available to individuals who do not own a permanent house in any part of India.

Q: What is the interest rate for home loans under PMAY?

The interest rate for home loans under PMAY may vary based on factors such as the lending institution and current market rates.