Pradhan Mantri Awas Yojana (PMAY)

An initiative launched on the 1st of June, 2015, by the Government of India, Pradhan Mantri Awas Yojana is a specially designed affordable housing scheme for the urban poor of the country. The main intention behind the launch of this scheme is to promote affordable housing for all the people of the weaker section of the urban society.

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Pradhan Mantri Awas Yojana, implemented by the MoHUA (Ministry of Housing and Urban Affairs) is a CLSS (Credit Linked Subsidy Scheme) and offers interest subsidy on home loans for:

  • EWS (Economically Weaker Section)

  • LIG (Low Income Group)

  • MIG - 1 (Middle Income Group – 1)

  • MIG - 2 (Middle Income Group – 2)

The Union Budget presented on the 1st of February, 2022 by the honorable Finance Minister Nirmala Sitharaman claims that the Indian Government has attained a significant leap in the PMAY from April 2015 till December 2021. The government claims to have provided over 50 lakhs of “Pucca Houses” under the Pradhan Mantri Awas Yojana project till date and promises to reach the target of 80 lakh houses at the end of the financial year 2022 – 2023 for which a handful amount of Rs. 48,000 crores have been allocated.

The Objective of Pradhan Mantri Awas Yojana

Property and land prices have seen a continuous surge in the past few years making it extremely burdensome for most Indians to have their own dream house in the metropolitan cities of India. Pradhan Mantri Awas Yojana is a ray of sunshine for the urban poor looking out for a permanent roof over their family’s head.

Pradhan Mantri Awas Yojana scheme is mainly divided into 2 parts keeping in mind the area where the individual belongs, that is,

  • Pradhan Mantri Awas Yojana – Urban (PMAY – U)
    Mostly includes all the industrial development bodies, notified planning authority, development authority, and others which are categorized in MIG-1 and MIG-2 sub-heads.

  • Pradhan Mantri Awas Yojana – Gramin (PMAY – G)
    Includes villages, rural and slum areas, and others that are categorized in EWS and LIG sub-heads.

  1. Loan Interest Subsidy

    Loan interest subsidy is available for the various below-mentioned categories of the individuals falling under the PMAY category:

    Economic Section Loan Interest Subsidy
    Economically Weaker Section (EWS) 6.50%
    Lower Income Group (LIG) 6.50%
    Middle Income Group - 1 4%
    Middle Income Group - 2 3%
  2. Income Range of Groups

    The applicants need to fall under the eligibility category of the Pradhan Mantri Awas Yojana in order to attain its benefits. All the economic groups are divided as per their income range:

    Economic Section Income Range (Annually)
    Economically Weaker Section (EWS) Up to Rs. 3,00,000
    Lower Income Group (LIG) More than Rs. 3,00,000 but less than Rs. 6,00,000
    Middle Income Group - 1 More than Rs. 6,00,000 but less than Rs, 12,00,000
    Middle Income Group - 2 More than Rs. 12,00,000 but less than Rs. 18,00,000

Features and Benefits Under PMAY – U, and PMAY – G

Here are the main features under the various categories of the Pradhan Mantri Awas Yojana scheme:

Features Economically Weaker Section Low Income Group Middle Income Group - 1 Middle Income Group - 2
Subsidiary Interest Rate 6.50% 6.50% 4.00% 3.00%
Dwelling Unit Carpet Area (Maximum) 30 sq. m 60 sq. m 160 sq. m 200 sq. m
Subsidy Amount (Maximum) Rs. 2.67 Lakhs Rs. 2.67 Lakhs Rs. 2.35 Lakhs Rs. 2.30 Lakhs
Subsidy for Home Loan Quantum (Maximum) Rs. 6 lakhs Rs. 6 lakhs Rs. 9 Lakhs Rs. 12 Lakhs
Home Loan Tenure (Maximum) 20 years 20 years 20 years 20 years
Interest Subsidy NPV Discount Rate 9% 9% 9% 9%

Eligibility Criteria for Pradhan Mantra Awas Yojana

An individual is eligible to receive benefits and subsidies of PMAY if they fall under the following categories:

  • The family’s income must not exceed Rs. 18,00,000 in the preceding financial year.

  • Either the woman should be the owner or the joint owner of the house on the property papers or deed. This rule is only not applicable only in the case where there is no female member in the family.

  • Benefits will be available to individuals only on the “New Property Purchase” and not an existing one. Also, only 1 “Pucca House” can be claimed in the name of one individual.

  • As per the Census 2011, the property must fall in the area covered under the Pradhan Mantri Awas Yojana scheme.

How to Apply for PMAY Scheme?

Simple steps need to be followed to apply for the Pradhan Mantri Awas Yojana Scheme or CLSS (Credit Linked Subsidy Scheme):

  • Visit the official website of

  • From the “Menu” tab, select the “Citizen Assessment” column.

  • Enter the details of the Aadhaar Card of the applicant.

  • After the details, the website will be redirected to the application form page.

  • Mention all the necessary details like,

    • Income details

    • Bank account details

    • Personal details

    • Family details

    • All the other required details

  • Save all the details after cross verifying them for accuracy.

  • A “Unique Application Number” will appear after the submission of all the relevant details.

  • Next, download the filled form.

  • Deposit the downloaded for to the nearest CCSC office offering the Pradhan Mantri Awas Yojana scheme.

  • After verification, the PMAY scheme will be activated under the applicant’s name.

Tax Benefits Under Pradhan Mantra Awas Yojana Scheme

As per the sections under the Income Tax Act, 1961, the following tax benefits can be availed after the purchase of the PMAY scheme:

Sections Deductions
Section 80C Deductions up to Rs. 1,50,000 on principal repayment of home loan annually
Section 24(B) Deductions up to Rs. 2,00,000 on interest payment of home loan annually
Section 80EE Rs. 50,000 tax relief for first0time property buyers
Section 80EEA Deductions up to Rs. 1,50,000 on interest payment of home loan annually if the property is under the category of affordable housing

Documents Required for PMAY Scheme

  1. For Salaried Applicants:

    • Application form (filled and downloaded from official website)

    • Identity proof

    • Address proof

    • Income proof

    • Documents of property purchase

  2. For Self-Employed Applicants:

    • Application form (filled and downloaded from official website)

    • Identity proof

    • Address proof

    • Address proof for business

    • Income proof

    • Documents of property purchase

Past 5 Year annualised returns as on 01-06-2024

^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.

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