Pradhan Mantri Awas Yojana (PMAY): Benefits, Features And More

Pradhan Mantri Awas Yojana (PMAY) is a government-backed scheme launched to provide ‘affordable housing to all.’ It offers subsidies on home loan interest rates, among other benefits, to make housing more affordable in the country. This housing scheme is directed toward the economically backward population-based in rural and urban areas.

To become a beneficiary of PMAY, it is crucial to find out about important scheme-related details, including its features, benefits, and qualifying criteria. In addition to this information, you will also find details related to the scheme’s components and the steps involved to claim subsidy below.

What is Pradhan Mantri Awas Yojana (PMAY)?

The government of India launched Pradhan Mantri Awas Yojana or PMAY in June 2015 to make housing affordable for the economically weaker section of the country. Under this scheme, eligible applicants can claim a subsidy on their home loan interest rate, which they had taken out to finance their first house. 

Note that the interest subsidy amount varies among the different economic categories under Pradhan Mantri Awas Yojana. 

The affordable housing scheme is divided into two categories –

1. PMAY Urban: Approximately 4,331 towns and cities come under the affordable housing scheme.  
2. PMAY Gramin: Previously known as Indira Gandhi Awas Yojana, PMAY-G aims to promote access to affordable housing across rural India, except Chandigarh and Delhi. 

This housing scheme involves the construction of nearly 20 million affordable houses by March 31, 2022. 

Key Parameters of PMAY

• Here is a tabular representation of the criteria that one needs must fulfil to get benefits of PMAY: 

Parameters	MIG 1	MIG 2	EWS and LIG
Eligible household income	Rs. 6 lakh to Rs. 12 lakh	Rs. 12 lakh to Rs. 18 lakh	Up to Rs. 6 lakh
Carpet area	160sqm	200sqm	60sqm
Subsidy on Interest rate	4.00%	3.00%	6.5%
Amount eligible for interest subsidy	Rs. 9 lakh	Rs. 12 lakh	Rs. 6 lakh
Purpose of home loan	Self-construction or purchase	Self-construction or purchase	Self-construction or purchase or extension
Maximum amount of subsidy	Rs. 2.35 lakh	Rs. 2.30 lakh	Rs. 2.67 lakh
Female ownership	Not necessary	Not necessary	Required but not necessary for construction or extension

 
Components of Pradhan Mantri Awas Yojana (PMAY)

These are the four major components of PMAY:

Credit-linked subsidy scheme

Under CLSS, eligible candidates can avail of home loans at reduced EMIs owing to an interest subsidy. Individuals belonging to the EWS and LIG categories can get a maximum interest subsidy of 6.5%. However, note that such benefit is available only if the loan amount does not exceed Rs. 6 lakh.

In-Situ slum redevelopment

This scheme aims to rehabilitate slums and provide houses to lower-income families residing in those areas. Note that the Central Government determines the property prices, while the respective states or Union Territories decide the beneficiary’s contribution to the price.

Affordable housing in partnership or AHP

AHP offers financial aid of up to Rs. 1.5 lakh to EWS families on behalf of the Central Government to purchase a house. 

House construction or enhancement

This PMAY component targets families of economically weaker sections who cannot benefit from the other three components. These beneficiaries receive financial aid of up to Rs. 1.5 lakh from the Central Government to fund the construction of or renovate their existing houses. 

Features of PMAY

Here are the top features of the Pradhan Mantri Awas Yojana:

• A subsidised interest rate of up to 6.5% on home loans will be offered to those who opted for housing credits for a tenure of up to 20 years.
• Senior citizens and differently-abled applicants will be given preference when allocating properties on the ground floor.
• Houses will be constructed using eco-friendly and sustainable technology.
• The interest subsidy depends on the applicants’ income slab and loan amount. Note that an additional loan amount beyond the subsidised loan limit will attract a non-subsidised rate of interest.  

That said, let us check the benefits of this credit-linked housing scheme.

Benefits of PMAY

These are among the primary benefits of Pradhan Mantri Awas Yojana:

• Availability of affordable housing 
• Facilitation of slum rehabilitation 
• Promotion of homeownership among women
• Access to affordable housing for all sections of the society

Take a look at the below table to find out more about the accompanying benefits across different income categories: 

Category	Annual Household Income	Loan Amount	Carpet Area	Subsidy
Economically Weaker Section (EWS)	Up to Rs. 3 lakh	Up to Rs. 3 lakh	Up to 30 square metres	6.5%
Low Income Group (LIG)	A maximum of Rs. 6 lakh	Up to Rs. 6 lakh	A maximum of 60 square metres	6.5%
Middle Income Group I (MIG-I)	A total of Rs. 12 lakh	Up to Rs. 9 lakh	Up to 160 square metres	4%
Middle Income Group II (MIG-II)	Up to Rs. 18 lakh per annum	Up to Rs. 12 lakh	A maximum of 200 square metres	3%

Note that individuals who wish to buy their first house or plan to construct a housing property can avail the benefits extended under PMAY. Additionally, those who wish to upgrade from a kutcha house to a pucca house can do so under the scheme’s CLSS component.

Subsidy Criteria for PMAY Home Loan

Subsidy criteria for different income groups for PMAY are discussed below:

Economically Weaker Section (EWS): If your annual household income is lower than or equal to Rs. 3 lakh then you can avail the benefits of PMAY scheme under the EWS category.

Lower Income Group (LIG): If your annual household income is between Rs. 3 lakh and Rs. 6 lakh, then you qualify under LIG and can avail the benefits of PMAY

Middle Income Group (MIG) 1: If your annual household income is less than Rs. 12 lakh but more than Rs. 6 lakh then you come under this group. You can avail a loan of up to Rs. 9 lakh for the construction of a home.

Middle Income Group (MIG) 2: Your annual household income has to be between Rs. 12 lakh and Rs. 18 lakh to be categorised under this group. You can avail a loan of Rs. 12 lakh under PMAY scheme.  

Also Read: PMAY Credit Linked Subsidy Scheme: CLSS Eligibility, Calculation Of Interest, And Key Points

What is PMAY-U and its Benefits?

Pradhan Mantri Awas Yojana (Urban) or PMAY-U is an initiative taken by the Central Government for all the different income groups. It has different criteria and limits set for the different groups. The scheme is being implemented by the Ministry of Housing and Urban Affairs; it aims to provide housing to all the eligible Indian households by the year 2022 as the nation completes its 75^th year of Independence.

Benefits of PMA-U:

• Loan can be availed for the construction or purchase of a house
• Loan repayment tenure is up to 20 years
• Priority is given to the senior citizens and differently abled persons for ground floors
• Eco-friendly and sustainable technologies are used for the buildings
• Basic amenities like gas connection, water and electricity will be included in the buildings  

What is PMAY-G and its Benefits?

Pradhan Mantri Awas Yojana- Gramin is introduced with a mission to provide affordable “Housing for All” by the end of the year 2022. The houses provided under this scheme have the basic amenities like electricity, water and gas connection and are eco-friendly. The minimum size of a house has been increased from 20 sq. m. to 25 sq. m.

Benefits:

• The cost of the houses are shared between the Central and State Government in a 60:40 ratio, which means that one will get an assistance of Rs. 1.20 lakh for each unit
• Union territories including Ladakh will get full financial assistance from the Central Government
• The north-eastern and the Himalayan states along with Jammu and Kashmir will get an assistance of Rs. 1.30 lakh for each unit. 
• The Gram Sabhas identify and verify the beneficiaries using the parameters from Socio-Economic and Caste Sensus
• The houses built will get an assistance of Rs. 12,000 for construction of toilets under Swacch Bharat Mission – Gramin in cooperation with MGNREGA
• Payments are made directly to the bank or post office accounts linked with Aadhaar digitally 

PMAY Scheme Tax Benefits

Apart from reducing the GST from 12% to 8% for all the house loans under PMAY, there are also other tax benefits one can avail under sections of the Income Tax Act.

• One can claim a tax deduction of up to Rs. 1.5 lakh under Section 80C of Income Tax on the first home principal repayment. Senior citizens can claim deductions of Rs. 2 lakh under the same section.
• Home loan borrowers can claim a deduction of Rs. 2 lakh if the construction is completed within 5 years from the loan application. If it takes more than 5 years, then one can claim a deduction of only Rs. 30,000.
• Home loans of up to Rs. 40 lakh can get an additional deduction of Rs.1.5 lakh.
• Home owners residing in a different city for work can claim a tax deduction of up to Rs. 1.5 lakh under Section 80C for a vacant  property or one that is to be rented.
• There are no tax benefits available on the principal amount paid for an under-construction property but one can claim so on the interest paid. As per the Income Tax rules, one can claim tax deductions on the interest paid during the construction of the house post completion of construction. It can be claimed over five consecutive financial years with the annual limit being Rs. 2 lakh.

Pradhan Mantri Awas Yojana (PMAY) Eligibility Criteria

There are additional requirements besides meeting the annual household income threshold to qualify for Pradhan Mantri Awas Yojana. Only those who do not own a pucca house or have not availed benefits under other affordable housing schemes are eligible for PMAY. 

Additionally, provisions have been made for widows, differently-abled individuals, transgender people, and senior citizens. 

First-time homebuyers who do not meet the Pradhan Mantri Awas Yojana eligibility criteria can download the Navi App and avail of a home loan. We offer a high loan amount at the lowest rates, backed by quick processing time. Collectively, these make the borrowing experience simple and hassle-free. 

Documents Required for PMAY

Salaried individuals need to submit the following documents for PMAY:

Identity proof: PAN card/ AADHAR card/ passport/driving license

Address proof: AADHAR card, Voter card, life insurance policy (if any), property tax payment receipt, etc. 

Income proof: Bank statement of last 6 months / salary slips of the last 2 months / ITR receipts/ Property Registration Certificate/ sales deed/ copy of builder payment receipt

Self-employed individuals have to submit the following documents:

Identity proof: PAN card/ Aadhaar card/ passport/driving license

Address proof: Bank statement/ Aadhaar card/ rent agreement/ voter card/ life insurance policy

Business proof: Establishment certificate/ trade license/ SSI registration/ PAN card/ VAT registration/ factory registration certificate/ sales tax receipt/ partnership deed/ registration number issued by ROC

Guidelines for PMAY Scheme

PMAY scheme offers affordable housing for all. It provides a subsidy on the interest paid which reduces the EMI payments. The following are some guidelines one should keep in mind before availing benefits of the scheme:

• Make sure that your builder is registered under the Real Estate Regulatory and Authority Act. It is compulsory for real estate builders to be registered with RERA.
• PMAY has multiple banks linked for home loan benefits. Ensure that your bank is linked with PMAY.
• A home loan borrower can be a beneficiary of PMAY only if his/her annual income does not exceed the maximum limit of Rs. 18 lakh.
• The beneficiary and his family availing the benefits of PMAY should not own a house. Moreover, they should not have availed benefits of any other scheme earlier.

Who Can Become a Beneficiary under PMAY?

To become a beneficiary under PMAY scheme, an individual has to fulfil the following criteria:

• One must not own a pucca house
• The individual must not have availed benefits of any other scheme 
• Household income should be between Rs. 3 lakh and Rs. 18 lakh

How to Avail Subsidy Under PMAY?

Individuals can choose to apply for PMAY online by following these steps:

Step 1: Visit the official PMAY website 

Step 2: From the “Citizen Assessment” dropdown menu, select the “Benefits under other 3 components” option

Step 3: Enter your Aadhaar card details and click on submit

Step 4: Post successful verification of the Aadhaar card details, you’ll be redirected to the application page

Step 5: Enter all required details (name, income, number of family members, etc) accurately

Step 6: Type the captcha code correctly and click on submit  

To apply for PMAY offline, individuals need to visit a Common Service Centre (CSC) in their state or union territory. There, they need to submit the duly signed application form along with the required documents to complete the application procedure. 

The list of documents that one needs to submit to avail of subsidy under PMAY are as follows:

• Aadhaar card 
• Bank details along with account statements 
• PAN card 
• Property valuation certificate 
• Declaration of property under construction
• A declaration affirming that the applicant or the beneficiary family does not own a pucca house
• Construction agreement with a builder (if applicable) 
• ITR
• Salary slips for the past three months
• EWS certificate

Under Pradhan Mantri Awas Yojana, the housing loan interest subsidy is routed via two nodal agencies, namely: National Housing Bank (NHB) and Housing and Urban Development Corporation (HUDCO).

Steps by which the amount of subsidy is credited to the borrower’s account are:

Step 1: The housing loan is disbursed to the borrower.

Step 2: Borrower’s details are sent for data validation.

Step 3: Post verification, the subsidy is approved/rejected.

Step 4: After receiving the subsidy post-approval, the lending institution credits the amount to the borrower’s home loan account. 

Also Read: Top 9 Banks/NBFCs for Home Loans in India (2022): Interest Rates, Eligibility And Documents Required

How Can You Apply for PMAY Scheme?

If you want you can also apply for PMAY offline. To apply offline you have to go to a Common Service Centre. There, you will get the application form which you have to fill out and submit with a payment of Rs. 25 plus GST.

What is PMAY EMI Calculator?

PMAY EMI calculator is the subsidy calculator. It will help you know your subsidy eligibility and also help you calculate your EMIs beforehand so that you can manage your finances accordingly. You will need the following details to use PMAY EMI calculator:

• Annual household income
• Loan amount
• Loan repayment tenure

Final Word

Pradhan Mantri Awas Yojana is an initiative to provide affordable housing to lower economic groups in India. Individuals who wish to own a house but could not do so due to lack of funding can now opt for a housing loan at a subsidised rate of interest under the PMAY scheme. To ensure hassle-free processing of the same, it is important for intending borrowers to keep the pointers discussed above in mind.

FAQs on Pradhan Mantri Awas Yojana (PMAY)

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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.