PM Awas Yojana: Save ₹2.6 Lakh on home loan

September 26, 2017 Finance Talk Valli Sarvani No comments

Last year, on December 31st, Prime Minster Narendra Modi announced that the Credit Linked Subsidy Scheme (or CLSS) under the Pradhan Mantri Awas Yojana (Urban) (or PMAY (Urban)) would be applicable to middle-income group (or MIG) beneficiaries up until the end of December of this year.

Under the CLSS, MIG beneficiaries with an annual income between ₹6 lakh and ₹12 lakh would be provided with an interest subsidy of 4% on a 20-year-loan component of ₹ 9 lakh. MIG beneficiaries with an annual income between ₹ 12 lakh and ₹ 18 lakh would get an interest subsidy of 3%.

Now, there has recently been an announcement stating that the subsidy scheme will be extended for fifteen more months, up until March of 2019.

This announcement was released by Durga Shanker Mishra, the Secretary of Housing and Urban Affairs, at the Real Estate and Infrastructure Investors Summit, which was organized by the National Real Estate Development Council (or NAREDCO).

Mishra related the government’s commitment to their “Housing for All” target for urban areas, and thus, he advised the private sector to invest more in affordable housing, since it is being so enthusiastically promoted by the government.

Later on, Mishra attended several hour-long discussions with a delegation of the NAREDCO, consisting of thirty members from the Council.

This delegation rose several issues in these discussions, including anomalies in GST rates concerning both completed and uncompleted housing projects, land scarcity, delays in construction permit grants, and stamp duties being higher and outside the purview of the GST.

The delegation was concerned about the influence of the GST and other taxes, including the fact that they account for over a third of the cost of residential properties.

Mishra assured the delegation that the government would look into the issues that were raised in these discussions, and that they would consider any interventions that might be needed.

Image Credit: Jean-Marie Hullot / CC BY 2.0