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What is CLSS and How Does It Work Under PMAY

What is CLSS and How Does It Work Under PMAY

The Credit Linked Subsidy Scheme or CLSS is one of the components of the Pradhan Mantri Awas Yojana or PMAY. It provides a subsidy on home loan interest rates (can be calculated using a home loan calculator online) and significantly brings down the loan’s total EMI amount making it easier to buy a house.

CLSS was introduced to provide affordable housing especially to families that fall under the Economically Weaker Sections (EWS), Lower Income Groups (LIG) and Middle Income Groups (MIG). 

There is an unavailability of institutionalised housing finance options at lower rates which is where this subsidy makes a significant contribution. 

Are you eligible for CLSS under PMAY?

To apply for this scheme, you are required to fall within any of these four income categories. Housing finance interest rates will be relaxed according to your economic group. 

Economic groups in the context of the PMAY/CLSS are defined as:

Economic GroupIncome (per annum)
EWS (Economically Weaker Sections)  LIG (Low Income Groups)Up to Rs. 3 lakhs 
LIG (Low Income Groups)Rs. 3 lakh to Rs. 6 lakhs per annum
Middle Income Group 1 (MIG1)Rs. 6 lakhs to Rs. 12 lakhs per annum
Middle Income Group 2 (MIG2)Rs. 12 lakhs to Rs. 18 lakhs per annum

Detailed eligibility criteria for Credit Linked Subsidy Scheme

Here is a list of additional eligibility criteria for the CLSS: 

  • Location of the desired property must be enlisted within the statutory towns list provided by the 2011 census
  • A female member must co-own the property for applicants falling in the EWS and LIG categories.
  • Applicants for PMAY CLSS should not have availed of any the previous government housing subsidies
  • PMAY CLSS applicant must be a first-time property buyer
  • PMAY CLSS applicants or their beneficiaries must not have a pucca house anywhere in India.
  • The PMAY CLSS applicants’ beneficiaries include husband, wife, and unmarried children
  • PMAY CLSS applicants who have a one or two-room house with a kutcha roof or wall can also apply for these benefits. 
  • PMAY CLSS applicant who belongs to Scheduled Tribes (STs), Scheduled Castes (SCs), or other minority sections is also eligible
  • If the PMAY CLSS applicant has the Kisan Credit Card (KCC), the credit limit should not exceed Rs. 50,000. 
  • The applicants must not own any vehicle such as a two-wheeler, three-wheeler, or four-wheeler.
  • The applicant’s household must not be equipped with a refrigerator or a landline.
  • Since this scheme was implemented in 2017, home loan borrowers approved after 2017 can enjoy these benefits. 

There is no fee, bank charges or miscellaneous charges hidden in your monthly EMI for processing a CLSS subsidy application.

Benefits extended to eligible groups under CLSS

Here are the PMAY (Pradhan Mantri Awas Yojana) benefits related to home loan tenures and subsidies. Note that female ownership is mandatory for EWS and LIG. 

BenefitsEWS(Economically Weaker Sections)LIG (Low Income Groups)MIG I(Middle Income Group I)MIG II(Middle Income Group II)
Loan Tenure20 Years20 Years20 Years20 Years
House Up-GradationCoveredCoveredNot CoveredNot Covered
Female OwnershipMandatoryMandatoryNot MandatoryNot Mandatory
Maximum Loan Amount for SubsidyUp to 3 LakhUp to 6 LakhUp to 9 LakhUp to 12 Lakh
Maximum Subsidy Rs.2.67 LakhRs.2.67 LakhRs.2.35 LakhRs.2.30 Lakh
Subsidy6.5 % of home loan interest rate6.5 % of home loan interest rate4% of home loan interest rate3% of home loan interest rate

How can you avail of the Credit Linked Subsidy scheme?

Identify the lending institutions that are affiliated with the PMAY Scheme. This can be done through scourging your newspaper or doing a quick search on the internet. After correctly identifying them visit the nearest branch to avail a loan. They will provide you with the home loan subsidy application which will have to be duly filled. 

You will also be asked to submit several documents such as your identity proof, income proof, property documents etc. for verification. Once all your documents are as per the checklist and if your application is deemed eligible for this subsidy, the sanctioned housing loan amount will be disbursed into your desired bank account. This lender is responsible for the paperwork required for you to receive your subsidy.

The bottom line

Prepare your application well and make sure your paperwork is complete as this will expedite the entire process. 
Are you eligible for the CLSS? Go ahead and apply for a home loan at Tata Capital and avail the subsidised rates of interest under the CLSS scheme.  Simply log on to our website and check your eligibility with our home loan EMI calculator. Using our EMI calculator for home loan saves you the time and energy in calculating your EMI payments and ensures that your loan journey is hassle-free.

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