An Ultimate Guide to Pradhan Mantri Awas Yojana (PMAY)

1. An Ultimate Guide to Pradhan Mantri Awas Yojana (PMAY) Introduction Everyone dreams of living in a house which they can call their own. After all, it is a basic necessity of life. Fortunately, to turn this dream of yours into reality, Prime Minister Narendra Modi has launched the Pradhan Mantri Awas Yojana (PMAY). Launched on 17 June 2015, this is a government- initiated housing scheme which is aimed at ‘housing for all by 2022’. Let’s learn all about Pradhan Mantri Awas Yojana. What is Pradhan Mantri Awas Yojana? Pradhan Mantra Awas Yojana (PMAY) is a Credit-Linked Subsidy Scheme (CLSS) on home loans which can be availed for new or resale purchase of home, extension or construction. The scheme aims at building two crore houses for the urban and rural population of India by the year 2022. This is basically a policy to promote affordable housing for low-income groups and economically weaker sections of society. PMAY is applicable across two different sections:  PMAY-U for urban population and  PMAY –G for the rural population PMAY-U includes subsidy schemes for the economically weaker section (EWS), Lower Income Group (LIG) and Middle Income Group (MIG I and MIG II). This classification is based on the beneficiary’s income, financial standing and their housing needs. Classification of the beneficiaries is dependent on the income groups they fall in:- Income group Annual household income (Rs.) EWS Up to 3 lakhs LIG From 3,00,001 to 6,00,000 MIG I From 6,00,001 Lakhs to 12,00,000 MIG II From 12,00,001 to 18,00,000 How can it benefit you? Basis your income group and the category you fall into, you can avail a subsidy on home loan under the Pradhan Mantri Awas Yojana.  Under this scheme, a maximum subsidy of 6.5% can be availed for a term of 20 years.  Mandatory provision of ground floor accommodation for senior citizens and differently abled citizens.  Houses constructed under this scheme would use eco-friendly technology.  The subsidy amount is as follows:-

2. Particulars LIG MIG I MIG II Rs. 3,00,001- 6,00,000 Rs. 6,00,001- 12,00,000 Rs. 12,00,001- 18,00,000 Household Income (Rs. p.a) Eligible Housing Loan Amount for Interest Subsidy (Rs.) Up to 6,00,000 Up to 9,00,000 Up to 12,00,000 Interest Subsidy (% p.a.) 6.50% 4.00% 3.00% Maximum loan tenure (in years) 20 years 20 years 20 years 60 Sq.m./645.84 sq.ft.* 160 Sq.m./1722 sq.ft. 200 Sq.m./2152.78 sq.ft. Maximum dwelling unit carpet area Max. Interest Subsidy Amount (Rs.) 2,67,280 2,35,068 2,30,156 Discount Rate for Net Present Value (NPV) calculation of interest subsidy (%) 9.00% 9.00% 9.00% calculation of interest subsidy (%) Looking at the ambitious features and benefits associated with this scheme, PMAY can definitely help fulfill your dream of living in your home. Eligibility of PMAY: Eligibility for PMAY under EWS/LIG scheme Within the first scheme wherein people belonging to the EWS may test their Pradhan Mantri Awas Yojana eligibility, some of the foremost criteria are as follows:  You cannot own a pucca house anywhere in the country.  An adult female must hold membership of the property in question. This condition is not applicable if added constructions are made on an existing kuccha property.  Location of the property must fall under statutory towns and their planning areas as per the 2011 census.  Applicants applying under the EWS scheme must have an annual income ranging between Rs. 3 Lakh to Rs. 6 Lakhakh to six lakh. This scheme came into effect on 17TH June 2015 and will end on 31ST March 2022.  The carpet area of the house must remain within thirty square meters for EWS beneficiaries and within sixty square meters in case of LIG beneficiaries. This particular scheme is available for all housing loans taken for property acquisition or construction. Additionally, repairs and extensions also come under this category.

3.  The maximum tenure of these loans is twenty years.  The age limit for repayment of the loan is fixed at 70 years. In the event of failure in repaying dues, banks or Non-Banking Financial Company will proceed to recover them in a manner deemed fit by them. Eligibility for PMAY under CLSS MIG Tier -1 You are eligible for the PMAY subsidy under CLSS MIG Tier 1 scheme only if you:  Do not own a pucca house anywhere else in the country.  Have not availed central or state assistance of any kind for housing scheme under the Indian government.  Have an adult female co-ownership situation going on for you. This is desirable and not mandatory.  Have the location of your property within the statutory towns designated by the 2011 census.  Apply for credit linked subsidy at 4% for loan amounts ranging up to rupees nine lakhs in case of MIG-1. Even if the bank has sanctioned greater loan amounts, your subsidy limit will remain so.  Have an annual income between rupees six lakhs to twelve lakhs.  Extend the maximum loan tenure till thirty years or till you are seventy years of age, whichever is earlier.  As a married couple, go for either joint ownership or single ownership.  Have a carpet area remaining within 120 square meters and loan accounts under the scheme linked to Aadhar.  Have an income wherein it is possible to make total deductions from gross income, including the EMI that has to be paid for home loan which should not exceed 50% of the gross. Eligibility for PMAY under CLSS MIG Tier -2 You are eligible for PMAY subsidy if you:  Do not own pucca property anywhere in the country.  Have not availed central or state assistance from the Indian government under housing scheme.  Have an adult female in your family who can take up ownership. This is desirable but not mandatory.  Have a property location which falls under statutory towns mentioned in the 2011 census.  Can avail the credit linked subsidy at 3% for rupees 12 lakh for MIG-2. It will remain restricted to that even if loan amount is increased.  Can repay the loan within twenty years.  Have an annual income within rupees 12 lakh to 18 lakh.

4.  Have carpet area of the house within 150 square meters.  Have loan accounts under the scheme linked to your Aadhar. How carpet area can affect your PMAY subsidy?  Why this decision came into being?  Other Factors at Play  Impact on other Sectors  What are the revised norms? Pradhan Mantri Awas Yojana: All You Need To Know:  Eligibility Criteria For The Yojana  Subsidies Offered Under The Scheme  Documents Required To Avail The Subsidy What are the revised norms? In keeping with the revised conditions of the PMAY, the Ministry of Housing and Urban Affairs has increased the carpet area of properties eligible for subsidy under CLSS. In case of MIG, the increase has been from the previous 120 square meter to 160 square meter. In case of MIG-1, the change has been from the previous 150 square meter to 200 square meter in case of MIG-2. Why this decision came into being When learning everything about PMAY, it is important to understand why the decision for enhancement was undertaken. It was for the purpose of improving upon the existing exclusions of the PMAY mission that barred admittance of an entire section belonging to MIG and LIG. Such an initiative has been taken up with an intention to enhance the economic activity that can majorly contribute to improvement on the overall demand side. These modifications will allow more MIG customers to be eligible for subsidy and get their hands on the benefits extended. The mission taken on by the PMAY will also improve construction activity. Other factors at play You must be aware that under the new norms developed by the government, individuals having an annual income ranging between Rs. 6 Lakhs to Rs. 12 Lakhs would qualify for subsidy interest. This will be based on scheme of MIG-1 while under scheme MIG-2 individuals with an annual income of Rs. 12 Lakh to Rs. 18 Lakh will be eligible. The interest subsidy for MIG-1 and MIG-2 will remain fixed at 4% and 3% respectively. An increase in the loan amount will not affect this condition. The tenure for repayment of such loans will remain within twenty years of borrowing. How it benefits other spheres The increase in carpet area of houses falling under the Pradhan Mantri Awas Yojana will also go down with the Reserve Bank of India. This is because of its recent decision to make changes to housing loan limits. These changes are applicable for properties appertaining to Priority Sector Lending from an existing Rs. 28 Lakh to Rs. 35 Lakh in metro cities across the country. The increase

5. has also been from the existing Rs. 20 Lakh to Rs. 25 Lakh in all other centers. This has been done keeping in mind the overall expenditure of dwelling units in metro cities. Impact on other sectors With the revision of norms and the resultant increase in construction activity, positive impact has been observed across other core sectors such as steel, machinery, cement and other allied sectors. Additionally, it must also be understood that increased construction activity inside urban areas are directly proportional to increased employment opportunities for skilled and unskilled labourers in the country. The scope of CLSS has been expanded keeping in mind the approval of the Cabinet. This scheme has taken off in the right direction with the changes made to existing norms as a result of greater inclusion and as of now almost forty thousand beneficiaries have moved forward in realizing their dream of owning their own home. Documents required to avail the subsidy In order to prove yourself eligible for the PMAY subsidy scheme, you will be expected to present certain documents which are the most basic ones owned by everyone in the country. Some of these documents are your photograph, KYC documents and Aadhar card. Additionally, salary slip or income certificate with an updated bank statement for all those who are salaried applicants is also necessary. You will also have to provide your income tax returns for the last two years. You will need to provide details of your business bank account in case you are a self-employed individual. For self- employed applicants – a self-certificate or an affidavit is required as proof of income. A customer declaration undertaking and additional application form will also be required at the time of application.