In a good news for homebuyers, under the Pradhan Mantri Awas Yojna (PMAY), the housing and urban affairs ministry has increased the carpet area of houses eligible for interest benefit for the middle-income group (MIG) by 33%.
The decision is likely to benefit more the people in tier three and four cities as housing cost is much lower there.
If your annual income is up to Rs 18 lakh, even for buying a 2,100 sq feet flat or house, you can now avail Rs 2.3 lakh upfront subsidy on interest.
The interest subsidy under PMAY is available in different categories for first-time home buyers.
Households with yearly income between Rs 6 lakh and Rs 12 lakh have been put under MIG-I category, while those earning between Rs 12 lakh and Rs 18 lakh fall under MIG-II segment.
The government provides 4 percent interest subsidy for Rs 9 lakh in the case of MIG-l home buyers and 3 percent interest subsidy for Rs 12 lakh in the case of MIG-II home buyers.
Till now, houses with carpet area up to 120 sq metres for MIG-I and up to 150 sq metres for MIG-II were eligible for interest subsidy. Now, these have been increased up to 160 sq metres (1,722 sq ft) and 200 sq metres (2,153 sq ft) for these two categories.
With a goal of building 20 million affordable houses by 31 March 2022, PMAY is an initiative by Government of India in which affordable housing will be provided to the urban poor.
It has two components-Pradhan Mantri Awas Yojana (Urban) (PMAY-U) for the urban poor and Pradhan Mantri Awaas Yojana (Gramin) (PMAY-G and also PMAY-R) for the poor in the rural parts of the country.