PMAY was introduced by Prime Minister Narendra Modi on June 1, 2015.
This scheme is pertaining to a cut in GST rate from 12% to 8% in-house purchasing.
This will be applicable to the Middle Income Group (MIG).
Any individual whose annual income is in between Rs. 6 lakh to Rs. 12 lakh will be eligible for 4% subsidy on a loan of up to Rs. 9 lakh.
The Central Government has taken a prominent decision by scaling down GST from 12% to 8% on affordable homes. This generous percentage of GST rate cut, which is introduced under Pradhan Mantri Awas Yojna (PMAY), can pertinent only to those homebuyers who will purchase houses using the Credit-Linked Subsidy Scheme (CLSS). PMAY was introduced by Prime Minister Narendra Modi on June 1, 2015, with the sole objective of providing affordable housing to the urban poor. Besides that, CLSS is one of the components which comes under PMAY. In this scheme, the Central government offers certain interest subsidy to only those customers who meet some particular criteria. CLSS provides various limitations which must be fulfilled to be eligible for these benefits. But who doesn’t meet the requirements will continue to pay 12% GST for the same house.
What does this scheme say?
Indian homebuyers, who are impoverished, are seeking a leg up from the government to make their dream home. Hence, after the months of speculation, this initiative of GST rate cut has been taken by Finance Ministry. This scheme is pertaining to a cut in GST rate from 12% to 8% in-house purchasing. Any individual, who is a first-time homebuyer with a family income of up to Rs. 18 lakh per annum, is entitled to have a benefit of up to Rs. 2.7 lakh while buying an apartment or house. This whole condition will be applicable to any house or apartment which has up to 150 square meters (1615 sq ft) carpet area under the Credit-Linked Subsidy Scheme.
Who comes under 8% GST?
Introduction of GST had spelled unrest among the Indian homebuyers and several protests were done by many homebuyers’ forums. In spite of that, MR. Modi’s cabinet wasn’t less enthused; on the contrary, Finance Ministry was very determined to provide some relief to aspiring homebuyers from such soaring GST rates. Now the question arises “who comes under this GST rate cut?” So this will be applicable to the Middle Income Group (MIG).
As PM’s cabinet has already approved an increase in carpet area so under this category the carpet area of the houses is increased from 90 square meters to 120 square meters. Any individual whose annual income is in between Rs. 6 lakh to Rs. 12 lakh will be eligible for 4% subsidy on a loan of up to Rs. 9 lakh.
Under this category, the carpet area of the house has been increased from 110 square meters to 150 square meters. It implies that any person whose annual income is in between Rs. 12 lakh to Rs. 18 lakh will be eligible for 3% subsidy on a loan of up to Rs. 12 lakh.
What is the role of “carpet area”?
Carpet area is the only area on which all projects should be registered and due consideration is also embraced by the Central government for providing such subsidies. The carpet area can be defined as the area enclosed within the walls and excludes the thickness of the inner walls. In any house or apartment’s case, the carpet area must be up to 1615 sq ft to be eligible for the scheme; additionally, in low-cost-housing projects, which have infrastructure status, the carpet area must be up to 646 sq ft.
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