PMAY CLSS extended until March 31, 2021: How to take advantage of the subsidy up to Rs 2.35,068 for the purchase of a home



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Key points

  • The extension will help create demand for affordable housing and will result in an investment of Rs 70 billion rupees in the housing sector, FM said.
  • If your annual income is between Rs 6 lakh and Rs 12 lakh, it will be included in the MIG-1 scheme
  • The maximum amount of subsidy that one can take advantage of under the MIG-I scheme is Rs 2.35,068

New Delhi: In announcing the second set of measures under the Rs 20 lakh crore economic package, Finance Minister Nirmala Sitharaman announced on Thursday the extension of Pradhan Mantri Awas Yojana’s Linked Credit Subsidy Plan (CLSS), by one more year until March 31, 20221 The extension will help create a demand for affordable housing and will generate an investment of Rs 70,000 crore in the housing sector, FM said.

Under the CLSS, mortgage loan borrowers can take advantage of the interest subsidy of up to Rs 2.35,068 to buy their first home. The final amount of the grant will depend on the applicant’s annual income in the last financial year, the loan amount, and the size of the home.

If your annual income is between Rs 6 lakh and Rs 12 lakh, you will be under the MIG-1 scheme and those with an income between Rs 12 lakh and Rs 18 lakh will be in the MIG-II category. It is worth mentioning here that the maximum amount of subsidy that you can take advantage of under the MIG-I scheme is Rs 2.35,068 and Rs 2,30,156 under the MIG-II scheme. The government pays this subsidy to its bank from which it has taken the mortgage loan. After receiving this subsidy, your bank will reduce EMI on your mortgage loan.

How the CLSS subsidy is calculated

In the MIG-I category, the amount of the subsidy is calculated based on an interest of 4% on the loan amount up to Rs 9 lakh. In the MIG-II category, an interest subsidy of 3% is granted for loans of up to Rs 12 lakh. Even if you have taken a loan for a larger amount to buy a house, your subsidy will be limited to the previous amount.

To calculate the amount of the subsidy, the tenure of the loan is calculated as 20 years or the actual tenure of the loan, whichever is less.

How to request CLSS

To take advantage of this subsidy, you must be a first time home buyer. If you or your family members already have property in your name, then you cannot take advantage of this subsidy. The application to use this subsidy will be processed through the bank from which you made use of the mortgage loan. The entire process takes 3-6 months to complete.