Owning a house is not just a matter of security; it’s a matter of emotions too. When someone starts earning, the first thought that crosses their minds is they should have their own house. With this emotion, some expectations are built up within that individual and his family. Today due to PMAY, many people’s dream of owning a house is becoming true.
The government of India started Pradhan Mantri Awas Yojana [PMAY] on April 25, 2015; this scheme is launched to help and support the Economically Weaker Sections [ EWS], Lower-Income groups [LIG], Middle-Income groups [MIG] by providing them interest subsidy on housing loans.
- The interest subsidy will be provided on home loans for the acquisition/construction of taxes to the Middle-Income Groups [ MIG].
- The interest subsidy will be provided on the home loans for acquisition, along with that Credit Linked subsidy will also be provided for home loans availed for new construction and addition of rooms, kitchen, toilet, etc. to existing dwelling as incremental housing to the Economically Weaker Sections [ EWS] and Lower-Income Groups [ LIG].
The interest subsidy availability depends upon the various criteria mentioned in the schemes.
Availing Subsidy from Axis Bank
Eligibility Criteria
- The beneficiary should not own any property/ pucca house in India.
For EWS/LIG
- Maximum household income p.a. for Economically Weaker Sections and Lower-Income Groups should be up to 6 lacs.
- Maximum property area [carpet area] can be up to their choice, and no restrictions are there.
- The maximum loan amount for subsidy calculation is up to 6 lacs.
- The maximum tenure for subsidy calculation is up to 20 years.
- The interest subsidy per annum is 6.50%.
- The subsidy amount goes up to Rs 2.67 lacs.
- Female ownership of the property is applicable.
- The beneficiary’s family should not have/own a property or a pucca house.
- The discount rate for Net Present Value [NPV] calculation of interest subsidy [%] is up to 9.00%.
For MIG
- The maximum household income p.a. is between Rs 6 lacs – Rs 12 lacs.
- Maximum property area [carpet area] is restricted by 160 sq. meter.
- The maximum loan amount for subsidy calculation is up to 9 lacs.
- The maximum tenure for subsidy calculation is up to 20 years.
- The interest subsidy per p.a. is up to 4.00%.
- The subsidy amount is up to Rs 2.35 lacs.
- Female ownership of the property is not applicable.
- The beneficiary’s family should not have/own any property or pucca house.
- The discount rate for Net Present Value [NPV] calculation of interest subsidy [%] is up to 9.00%.
Documents Required
- Identity proof- pan card, Aadhaar card, voter id card, driving license, etc.
- Address proof- utility bill, voter id card, Aadhaar card, pan card driving license, etc.
- Declaration by CLSS affidavit
Tax Benefits under PMAY
The principal portion of the home loan EMI is eligible for a deduction under Section 80C of the Income-tax Act, 1961, subject to a maximum limit of Rs. 1.50 lakh per financial year.
Section 24(b) of the Income-tax Act, 1961, allows a deduction for the interest component of the home loan EMI. For a self-occupied property, the deduction under Section 24(b) is restricted to Rs. 2 lakh per financial year.
Further, as a “first-time homebuyer”, you can also claim an additional deduction upto Rs. 50,000 per financial year under Section 80EE provided you fulfil certain conditions, which are:
- The value of the house should be Rs. 50 lakh or less
- The loan taken for this house should be Rs. 35 lakh or less
- The loan should be sanctioned by a financial institution or a Housing Finance Company
- The loan has been sanctioned between 01.04.2016 and 31.03.2017
- As on the date of loan sanction, you should own no other house
Note that the deduction under Section 80EE can be availed only after first exhausting the limit under Section 24(b) for the interest portion.
Additionally, in the Union Budget 2019, a new section 80EEA has been introduced allowing a tax benefit for interest deduction up to Rs 1.50 lakh for home loans in the affordable housing segment taken between April 1, 2019, and March 31, 2020. The other conditions to avail a deduction under this section are:
- The housing loan must be taken from a financial institution such as a bank or a housing finance company for buying a residential house property;
- You should not own any other house on the date of sanction of the loan (you should be a first-time homebuyer);
- Stamp duty value of the house property should be Rs 45 lakh or less;
- The carpet area of the house property should not exceed 60 square metres (645 sq. ft.) in metropolitan cities of Bengaluru, Chennai, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of Mumbai Metropolitan Region);
- Carpet area should not exceed 90 square metres (968 sq. ft.) in any other cities or towns;
- Further, this definition will be effective for affordable real estate projects approved on or after 1 September 2019
Plus, an additional condition to avail a deduction under Section 80EEA is that “first-time homebuyer” was not eligible for a deduction under Section 80EE.
There are certain conditions such as:
- The value of the house which you are owning should be 50 lakhs or less than that.
- The loan applied should be 35 lakh or less than that.
- The applied loan should be sanctioned by a Housing financial company or a financial institute.
- At the time of sanction of loan, the applicant should not own any house.
There are certain other benefits that an applicant can avail of; to learn about them, you can visit axis bank’s portal.
Conclusion
PMAY has made it easy for people who need a house to avail themselves at ease without much hassle. It has offered a lot of benefits for the Economically Weaker Sections [ EWS], Lower-Income Groups [LGI], Middle-Income Groups [MIG].
In this article, we have discussed how one can avail of axis bank through PMAY; people who are interested in availing a loan can go through this article and axis bank’s portal; they can apply for a loan in both ways, either online or offline by going to any branch of the axis bank with all the documents that are required for an applicant to get a loan.
This scheme has given a lot of help to people who didn’t have much money to get their own house and has helped improve and develop the poverty background of India.
