What is the PMAY (Pradhan Mantri Awas Yojana) Subsidy?

Indian citizens, regardless of their income, can benefit from the Pradhan Mantri Awas Yojana (PMAY)

A common question among most Indian families, especially those living in rented accommodations is whether they should buy a house. A government scheme launched in 2015 has managed to evoke a positive sentiment among Indians regarding home loans, freeing a lot of Indian families from the burden of rental homes—the Pradhan Mantri Awas Yojana (PMAY).

What is the PMAY Yojana?

The Pradhan Mantri Awas Yojana (PMAY) is an initiative of the Government of India to provide housing for all. An integral part of the PMAY Yojana is the Credit Linked Subsidy Scheme (CLSS), which offers interest subsidy, also called ‘PMAY Subsidy’, on home loans depending on their category.

Criteria for Pradhan Mantri Awas Yojana (PMAY) eligibility

Categories have been made under the PMAY scheme based on the annual household income earned by a family. These four categories are Economically Weaker Section (EWS), Lower Income Group (LIG), and Middle-Income groups 1 and 2.

1. Economically Weaker Sections (EWS)

Citizens whose annual household income is less than ₹ 3 lakh are categorised under EWS. A PMAY subsidy of 6.5% can be availed on a home loan for applicants belonging to this category, but it would only be applicable on a home loan of up to ₹ 6 lakh and for a house with a carpet area up to 645 square feet (sq. ft). The house must be owned or co-owned by a female member.

2. Lower-Income Group (LIG)

If a citizen’s annual household income is between ₹ 3 lakh and ₹ 6 lakh, they belong to the LIG category. The PMAY subsidy this category can avail of is 6.5% on a home loan up to ₹ 6 lakh for a house with a carpet area of up to 645 sq. ft. The house must be owned or co-owned by a female member.

3. Middle-Income Group (MIG) 1

Citizens whose annual household income is between ₹ 6 lakh and ₹ 12 lakh belong to this group. This category can avail of a PMAY subsidy of 4% on a home loan of up to ₹ 9 lakh. The house’s carpet area increases to around 1720 sq. ft in this category.

4. Middle-Income Group 2

Citizens with an annual household income between ₹ 12 lakh and ₹ 18 lakh belong to the second MIG group. Citizens under the MIG-2 category can avail a PMAY subsidy of 3% on a home loan of up to ₹ 12 lakh. The house must have a carpet area of 2150 sq. ft.

PMAY subsidies are making Home Loans popular

The Pradhan Mantri Awas Yojana has allowed Indians to benefit from the PMAY subsidy and incentivised them to apply for a home loan. As the PMAY subsidy reaches more beneficiaries, an increasing number of Indians are looking toward home loans to purchase a new house or renovate the one they own.

IDFC FIRST Bank offers home loans up to ₹5 crores, with tenures reaching up to 30 years. The home loan application process is digitised to ensure minimal physical documentation and faster approvals.

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