PM Awas Yojana: Get Rs. 2.4 Lakh Benefit on Buy First Home for 20 Years Tenure

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Good news for those people who are seeking for an affordable home whose annual income is upto Rs. 18 lakh, the government has announced two new subsidy slabs to push the real estate market and providing housing for all by 2022 under PM Awas Yojana.

According to the new slab, if your annual income is up to Rs 18 lakh and purchasing your first house. Your house cost will Rs 2.4 lakh less as the government provided subsidy on your home loan interest. At present, this subsidy is available to only those earning up to Rs 6 lakh per annum.

On December 31, 2016, the Prime Minister had announced two new subsidy schemes under Prime Minister Awas Yojana (PMAY), but their details have been worked out only now. As per the announcement, the slabs will apply to loans with a tenure of up to 20 years which was 15 years.

According to the schemes, now homebuyers will get the subsidy at different rates as per their annual income under PM Awas Yojana. The subsidy has been divided into three different categories.

First Category: whose annual income is less than Rs 6 lakh. will get a subsidy of 6.5% points on a principal component of Rs 6 lakh If they borrowed money at 9% interest, they will pay only 2.5% interest on Rs 6 lakh, and 9% on the remainder.

Second Category: While whose annual income is upto Rs. 12 lakh, they will get an interest subsidy of 4% points on a principal component of Rs 9 lakh.

Third Category: And finally in the third category whose annual income is above Rs.12 lakh and upto Rs.18 lakh they will get a subsidy of 3% points on a principal component of Rs 12 lakh.

Now above three categories people will get a subsidy of Rs 2.4 lakh (assuming an interest rate of 9%, see table) over a 20-year loan tenure and the monthly installment will be reduced upto Rs 2,200.

This subsidy benefit under PMAY is in addition to the income tax benefits on home loans, which can go up to Rs 61,800 per annum for someone in the 30% tax bracket.

However, the scheme implementation responsibility has been given to the National Housing Bank (NHB) and HUDCO which are the nodal agencies. This is the first time when the government had subsidized around 18,000 first time homebuyers, at a cost of around Rs 310 crore.

In this regard, a senior official said that the disbursal rate is likely to go up as the middle-income category has been brought under the scheme.

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