Finance

Credit-Linked Subsidy Scheme: All You Need To Know

The Indian Government has launched a series of social security programs since Narendra Modi took over reigns as the Prime Minister. One of the popular ones is Pradhan Mantri Awas Yojana. The Ministry of Housing and Urban Poverty Alleviation launched the Credit-Linked Subsidy Scheme (CLSS) for people to own their dream house.

CLSS is an interest subsidy scheme that falls under PMAY given to people for construction, purchase, extension, and improvement purpose. The CLSS provides subsidy to people who fall under the categories of Economically Weaker Section (EWS), Lower Income Group, and Middle-Income Group (MIG).

The primary objective of the CLSS scheme is to offer affordable housing to the urban population of the country. According to PMAY, the plan will become a reality by 2022.

Reasons why CLSS was designed:

  • If you are looking to gain interest concession on housing loans, PMAY’s CLSS scheme will offer the same.
  • CLSS has collaborated with over 70 banking and non-banking institutes which include housing finance companies, small finance banks, regional rural banks, and scheduled commercial banks, and scheduled commercial banks for providing the subsidies.
  • You can avail of CLSS only if you take the loan for 20 years and the maximum loan amount should be up to INR 6 lakh.
  • The interest subsidy that all categories are eligible for is 6.5 per cent for a tenure of 20 years and during the loan tenure, whichever is lower.

Features of CLSS:

For Lower-Income Group, the features are as follows –

  • Annual income: Between INR 3 lakh to INR 6 lakh
  • House size: 60 sq. Mt.
  • Interest subsidy:5 per cent
  • Loan limit subsidy: INR 6 lakh
  • Subsidy period: 20 years or loan tenure, whichever is lower
  • Maximum subsidy amount: INR 2.2. lakh

For Middle-Income Group, the features are as follows –

  • Annual Income: INR 3 lakh
  • House size: 30 sq. Mt.
  • Interest subsidy:5 per cent
  • Loan limit subsidy: INR 6 lakh
  • Subsidy period: 20 years or loan tenure, whichever is less
  • Maximum subsidy amount: INR 2.2 lakh

Other facts and features of CLSS:

  • You can apply for CLSS only if the loan amount is INR 6 lakh
  • You can avail of a subsidy up to INR 2.67 lakh
  • The scheme is also applicable for applicants who wish to construct or purchase a house
  • Any amount above INR 6 lakh, does not involve a subsidy
  • The applicants are eligible for the subsidy if they or their family members do not own a pucca house in any part of India
  • In case your family members have availed Government assistance under any housing scheme previously, will receive no benefits from the scheme

The features and facts change for MIG:

There are two kinds of MIG – 1 and 2. Let us learn the CLSS scheme features for them –

  • Annual Income: Between INR 6 lakh and INR 12 lakh
  • House size: 160 sq. Mt.
  • Interest subsidy: 4 per cent
  • Loan limit subsidy: INR 9 lakh
  • Subsidy period: 20 years or the tenure, whichever is less

The features and facts for MIG – 2 are –

  • Annual income: Between INR 12 lakh and INR 18 lakh
  • House size: 200 sq. Mt.
  • Interest subsidy: 3 per cent
  • Loan limit subsidy: INR 12 lakh
  • Subsidy period: 20 years or the tenure, whichever is less
  • The maximum subsidy you can avail of is INR 2.35 lakh

Application:

Those applicants who wish to apply for CLSS should do so through Prime Lending Institutes. After due verification, the applications will get sanctioned, and you can then claim the subsidies from Central Nodal Agencies (CNA).

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