Announcing the second set of measures under the Rs 20 lakh crore economic package, Finance Minister Nirmala Sitharaman announced extension of the Pradhan Mantri Awas Yojana (PMAY) Credit Linked Subsidy Scheme (CLSS), for one more year till March 31, 20221.
The extension will help create demand for affordable housing and will lead to Rs 70,000 crore investment in the housing sector, FM said.

Under the CLSS, home loan borrowers can avail interest subsidy up to Rs 2,35,068 for purchasing their first home. The final amount of subsidy will depend on the applicant's annual income in the last financial year, loan amount and the size of the house.

If your annual income is between Rs 6 lakh and Rs 12 lakh, you will fall under MIG-1 scheme and those having an income between Rs 12 lakh and Rs 18 lakh will fall under MIG-II category. Worth mentioning here is that the maximum amount of subsidy you can avail under MIG-I scheme is Rs 2,35,068 and Rs 2,30,156 under MIG-II scheme. The government pays this subsidy to your bank from which you have taken home loan. After receiving this subsidy your bank will reduce EMI on your home loan.

How CLSS subsidy is calculated

In the MIG-I category, the subsidy amount is calculated based on 4% interest on loan amount up to Rs 9 lakh. In the MIG-II category, an interest subsidy of 3% is provided for loan up to Rs 12 lakh. Even if you have taken a loan for a higher amount for purchasing a house, your subsidy will be limited to the above amount.

For calculating the subsidy amount the tenure of the loan is calculated as 20 years or the actual tenure of the loan, whichever is lower.

How to apply for CLSS

To avail of this subsidy, you have to be a first-time homebuyer. If you or your family members already have a property in their name then you can not avail this subsidy. Application for availing this subsidy will be processed through the bank from which you have availed the home loan. The entire process takes between 3-6 months to complete. 

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