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Know How CLSS Works

The CLSS is an integral part of the PMAY scheme that was introduced in 2015. Under the program, the government of India provides interest subsidy on home loans to eligible beneficiaries. Read on to know more about how it works.

In 2015, the government of India launched the Pradhan Mantri Awas Yojana, a flagship affordable housing scheme that aims to provide affordable housing to all Indian citizens. Apart from building new homes, under the CLSS, which is part of the PMAY, the government offers interest subsidy on the home loan to the people from the lower-income and economically weaker sections of the society.

Under the scheme, the government has collaborated with various non-banking financial companies and banks to provide financial assistance to the eligible beneficiaries. To ensure maximum benefits to the people, the government has categorised the beneficiaries into three categories based on their income. The categories are – EWS (Economically Weaker Section), LIG (Lower Income Groups) and MIG (Middle Income Group).

Who can avail of the CLSS benefits?

Anyone who belongs to any of the three income categories can avail the interest subsidy benefits on home loans under Pradhan Mantri Awas Yojana if they meet the following requirements.

  • For applicants belonging to the EWS and LIG category, their annual household income should range from three lakhs to six lakhs.
  • For applicants belonging to MIG – I category, the annual household income should be between Rs. 6 lakhs to Rs. 12 lakhs.
  • For applicants belonging to the MIG – II category, the house’s total income should not exceed Rs. 18 lakhs.

Apart from the above requirement, the subsidy applicants must fulfil the following criteria:

  • The property must be compulsorily registered in the name of the female family member – be it spouse, mother, or sibling.
  • The applicant or any other family member in the house should not own a pucca home in any part of India.
  • The property that the applicant wishes to purchase must be in 2011 census statutory town.
  • The applicant or any of the family members must not be a beneficiary of any other government housing scheme.

How to Apply for the CLSS subsidy?

To get the benefit of the home loan interest subsidy under CLSS, home loan borrowers can approach any lender of their choice that are authorised to grant the subsidy by the nodal agencies.

After the applicants zero-down on the lender, they must fill the subsidy application form with the necessary details and comply with the relevant KYC norms.

Next, applicants must submit the subsidy form along with the home loan application form and the required documents as mentioned in the form.

Once the lender reviews the documents, and if the borrower qualifies for the subsidy, they will credit the approved amount to the borrower’s account.

After the loan is disbursed, the lender will then approach the nodal agencies to process the subsidy amount. Once the subsidy is approved, the lender will receive the funds, and it will be credited to the borrowers’ loan account.

Once the subsidy is credited to the loan account, the EMI will automatically reduce as per the percentage of the subsidy received.

Thus, the interest subsidy offered under the PMAY has made home loans affordable for all, and millions of people in India have benefited from it.

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