Here are the three most popular types of life insurance policies;

Term Life Insurance

Term insurance is the purest form of insurance protection plan wherein the nominee
receives the benefits of the policy in the event of the policyholder’s demise.
Having said that, keep in mind in the event of the policyholder surviving the policy
term, no maturity benefits are payable to the policyholder. To overcome this
shortcoming, many life insurers in the country have introduced plans with survival
or money back benefits, which usually come at some additional costs.
Goyal says, “Term life insurance policies are ideal for people who want substantial
coverage at low costs. Ideally, every person with dependents and a limited budget
should buy term insurance to protect their loved ones financially.”
Endowment Insurance
Life insurance can be a tool not just for protection against death. Goyal explains, “It
can also be used as an instrument to help one achieve various financial goals like
planning for retirement, children’s education and/or marriage or buying a property.
An endowment insurance policy precisely does that.”
Apart from covering the life of the policyholder, an endowment life insurance
policy also helps the policyholder to save regularly over a specific period and create
a lump sum corpus payable on maturity.
According to experts, Endowment life insurance policies are ideal for those who
find it difficult to save money regularly. It helps in creating a disciplined investment
as well as offers protection against adverse events like the death of the family’s
breadwinner.
Whole Life Insurance
A whole life insurance policy offers lifetime coverage to the policyholder or 100
years by paying a certain premium for a limited period. Most whole life insurance
policies offer a survival benefit at the end of the premium payment term either in
lumpsum or yearly as long as the policyholder is alive. Additionally, a maturity
benefit is payable on survival after 100 years.
Goyal says, “Whole life insurance can also be a valuable tool in estate planning as it
can help one to create a virtual estate using life insurance.”
For instance, a 30-year-old person who purchases a Rs 15 lakh sum insured policy
by paying a monthly premium of approximately Rs 10,000 can create an estate of
Rs 15 lakhs from day one. With every passing year of the policy, a cash value is
also created due to the bonus added to the policy.

What is ULIP Plan?

1
 ULIP full form is Unit Linked Insurance Plan. The plan offers a two-fold benefit
to its investors. The investment component of ULIP enables you to invest and
achieve your long-term financial goals. On the other hand, its life cover ensures
financial security for your family in the event of an unfortunate incident.

What are ULIP Plans?

The term ULIP, which stands for Unit Linked Insurance Plan, is a financial
product that combines the benefits of insurance and investment in one plan. As
its full form suggests, ULIPs allocate a portion of the premium paid towards life
insurance coverage, while the remaining amount is strategically invested in
market-linked securities.

In essence, ULIPs allow individuals to invest in various funds such as equities,

debt, or a combination thereof. This dynamic investment approach not only helps
in wealth creation but also ensures insurance coverage, making ULIPs one of
the best investment options. For those seeking clarity on what ULIP means or its
definition, it can be summarised as a Unit Linked Insurance Plan that serves as a
unique combination of insurance and investment opportunities.

What are the Features and Benefits of Investing in ULIP Plans?

With ULIPs, your premiums contribute to both life coverage and market-linked
investments. Flexibility, tax benefits, and the potential for wealth creation make
ULIPs a smart financial choice.

Features of ULIP Plans:

1. Dual Purpose:
ULIPs serve a dual purpose by providing life insurance coverage along with an
investment component. This means that, in addition to securing your family's

2
 financial future, you also have the opportunity to grow your wealth through
investments.

2. Market-Linked Returns:
ULIPs allow policyholders to invest in a variety of funds, such as equity, debt, or
a combination of both, based on their risk appetite and financial goals. The
returns are linked to the performance of these funds, offering the potential for
higher returns compared to traditional insurance plans.

3. Flexibility in Fund Selection:

ULIPs allow investors to switch between different funds based on market
conditions as per their investment objectives. This allows policyholders to align
their investments with changing financial goals and market dynamics.

4. Transparency:
ULIPs offer transparency in terms of the charges and fees associated with the
plan. Policyholders receive regular updates on the fund performance and can
easily track the value of their investments.

5. Lock-in Period:
ULIPs come with a lock-in period of 5 years. This lock-in period builds financial
discipline and a long-term investment perspective.

Benefits of ULIP Plans:

1. Tax Benefits:
ULIPs offer tax benefits under Section 80C of the Income Tax Act for the
premiums paid. Additionally, the maturity proceeds are exempt from taxation
under Section 10(10D), making ULIPs a tax-efficient investment option.
2. Wealth Creation:
Through market-linked returns, ULIPs provide an opportunity for wealth
creation over the long term. The compounding effect can significantly enhance
the value of investments.

3
3. Insurance Coverage:
ULIPs provide life insurance coverage, ensuring financial protection for the
policyholder's family in the event of the insured's demise. This dual benefit of
insurance and investment makes ULIPs a holistic financial planning tool.

4. Partial Withdrawals:
ULIPs allow policyholders to make partial withdrawals after the lock-in period,
providing liquidity in times of need without surrendering the policy.

All about housing financing

companies
Many contemplate housing financing companies (HFCs) when they seek a
home loan. This is quite understandable as these entities specialise in the
home loan segment and their documentation process in loan disbursal is
simple and swift. People can approach an HFC for various types of loans such
as for purchasing non-residential properties, funding businesses, or meeting
personal expenses.
Housing finance companies (HFCs) have emerged as one of the preferred
options to choose when opting for a credit facility to buy a house. Their
documentation process in loan disbursement is uncomplicated, making it a
viable alternative to banks. However, they come with some limitations, the
4
primary being a high-interest rate and non-availability of an overdraft facility.
Let us take a look at their role and how they are different from banks:

What is a housing financing company?

Housing finance companies (HFCs) are organisations registered under the
Companies Act of 1956. Primarily, they are engaged in the business activity
of providing loans or finance for housing purposes through direct or indirect
means. Earlier regulated by National Housing Bank (NHB), HFCs’ regulation
was transferred to the Reserve Bank of India (RBI) in 2019 through amending
the statutes by the government. However, a few of their regulatory powers
are still with NHB.
HFCs were introduced with the idea of freeing up Indian banks with increasing
liabilities. They shared the housing loan portfolio and made the credit facility
easier for each income group. At present, the home loan disbursement by
HFCs is comparatively higher than that of banks owing to the high flexibility.
India is home to more than 25 HFCs.

Role of HFCs
The role of HFCs in India is important, as commercial banks prefer lending to
industries to individual homebuyers. Lending for industries implies a large
loan ticket and transaction size, thereby lies economies of scale owing to
lower transaction costs.
When it comes to providing housing finance, banks will have to find out
people who want to avail of smaller loans as well as have to incur higher
transaction costs. Besides, the loan repayment tenure of home loans is
typically very high, thereby blocking the monies for such a long term.
HFCs were introduced to provide easy and affordable loan options. Here is
their primary role:

5
 HFCs help in disbursing government-subsidised home loans to a particular
community
 They offer easy credit facilities to housing boards that plan colonies near
semi-urban or rural settlements. A prominent example is satellite towns
promoted by the government with the idea of decongesting the habitat in
the main city
 Rental discounting is another benefit offered by only HFCs. A rental
discount is a way by which real estate developers can get an easy home
loan against rental receipts applicable to the property
 HFCs are different from nationalised or private banks since they offer home
loans to those who are unable to make down payments

Difference between HFCs and banks

Both HFCs and banks are trusted institutions for availing of home loans.
However, certain differences make both poles apart. Learn more:
Points of
difference Bank HFC
The interest rate is slightly lower as
the same is linked with MCLR set up The interest rate is higher as
Interest rate by RBI. compared to the banks.
The banks are not very flexible The HFCs are very flexible in
when sanctioning the loan and a lot sanctioning loans and the
of paperwork is involved that makes process is comparatively
Flexibility the process extensive. uncomplicated.
Banks offer overdraft facilities if the
people pay equated monthly The overdraft or credit facility
instalments (EMIs) regularly and is not applicable for the loans
Credit facility have a clear CIBIL record. sanctioned by the HFC.
Documentation The documentation process is very The documentation process is
process lengthy. swift
The average duration for getting a
loan is very high as the loan
disbursement process involves a lot HFC are quite fast when it
Duration of documentation. comes to sanctioning loans.
They are very stringent when it They are flexible when it
comes to CIBIL scores. People with comes to considering the CIBIL
CIBIL score low CIBIL scores are often rejected. score.

6
 Key takeaways
 HFCs are registered under the Companies Act of 1956
 They were introduced to provide easy and affordable loan options to various
income groups
 The documentation process in house loan disbursement by HFCs is swift

What is Postal Life Insurance?

Table of Contents
 What is Postal Life Insurance (PLI)?
o How Postal Life Insurance stand out from Standard Term Insurance Plans?
o Types of Postal Life Insurance (PLI) Policies
o Which policy to prefer?
o Postal Life Insurance Scheme Details
o Features of Postal Life Insurance Policies
o Postal Life Insurance Scheme Bonus
o Benefits of Postal Life Insurance Policy
o Postal Life Insurance Eligibility
o Conclusion

The uncertainty of life seems to be the only certainty. Under such circumstances, the
best way that we can deal with the fear of the unknown is by getting prepared for an
unknown territory. One such aspect is the scary thought about what would happen to
our loved ones in our absence. Here's where life insurance policies come to the rescue.

7
The perfect financial security net for your family, life insurance plans are substantially
effective towards ensuring that all your loved ones get to continue with all their major
life goals without worries about financial stability.

While acknowledging the significance of life insurance plans in general, there is one
specific plan category that has gained ground over the years - Postal Life Insurance.
All thanks to its long-standing reputation for dependability, trustworthiness, and
affordable premiums.

So, read on to learn how Postal Life Insurance can be the safety net you need in
uncertain times!

What is Postal Life Insurance (PLI)?

Postal Life Insurance (PLI) is a government-backed life insurance scheme that is

offered by the Department of Posts, Government of India. As of 2023, the scheme
continues to provide affordable life insurance coverage to individuals, including
government employees, defense personnel, paramilitary forces, and the rural and semi-
urban population of India. Graduates as well as diploma holders from all recognized
universities are now also eligible for post office life insurance.

The premium payments for the PLI policy are made through post offices across the
country. The scheme also offers loan facilities against the policy's surrender value.

Overall, PLI is a reliable and popular life insurance option in India, especially for
individuals seeking affordable insurance coverage. The scheme provides an important
safety net for individuals and their families, ensuring financial security in case of
unforeseen events.

How Postal Life Insurance stand out from Standard Term Insurance Plans?
PLI is a government-run insurance programme to give policyholders and their families
financial stability and security.

The primary distinction between PLI and other types of life insurance is that PLI is
provided by the government, whereas other types of life insurance are offered by
private insurance companies. As a result, PLI policies are typically more cost-effective
than other types of life insurance and offer higher rates of interest than many other
types of investment options.

8
 However, one limitation of PLI is that it is only available in India and is primarily
meant for government and semi-government employees in India. In contrast, other life
insurance policies may be available to people in different countries and regions.

Overall, both PLI and standard life insurance plans provide policyholders and their
families with financial security, but PLI is a special, government-run programme with
certain advantages and restrictions, which we will be examining in this article.

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Types of Postal Life Insurance (PLI) Policies

Several types of Postal Life Insurance (PLI) plans are available under the Post Office
Insurance Scheme in India.

 Whole Life Assurance (Suraksha): This lifetime coverage plan provides financial
security to the policyholder's family in case of his/her untimely death. The premium
payments for this plan are fixed and remain constant throughout the policy's term.
This policy can be converted into Endowment Assurance Policy up to 59 years of
age of the insurant provided the date of conversion does not fall within one year of
the date of cessation of premium payment or date of maturity.
 Endowment Assurance (Santosh): This plan offers a combination of life
insurance coverage and savings. The policyholder pays a fixed premium for a
specified period, and on maturity, the policyholder receives the sum assured along
with the accumulated bonus.
 Convertible Whole Life Assurance (Suvidha): This plan allows the policyholder
to convert their policy to an endowment plan after a specified period. The premium
payments for this plan are also fixed.
 Joint life assurance (Yugal Suraksha): This plan covers the lives of two
individuals under a single policy. The premiums for joint life assurance policies are
typically less expensive than purchasing two separate policies, making it an
attractive option for some individuals. It is important to note that joint life assurance
policies only pay out once, typically upon the first death of the two individuals

9
 covered. After the payout, the policy will generally end, and no further benefits will
be provided.
 Anticipated Endowment Assurance (Sumangal): This plan provides a lump sum
payment at specified intervals during the policy term, in addition to the sum assured
and the accumulated bonus on maturity.
 Children Policy (Bal Jeevan Bima): This plan provides insurance coverage for the
children of policyholders. The policy matures when the child turns 18, and the sum
assured, along with the bonus, is paid out to the child.

Which policy to prefer?

Policy
When to prefer Example
Name

Rakesh is the sole breadwinner of his family,

Whole Life he chooses Whole Life Assurance Policy to
Assurance If you want lifetime ensure that his family is financially secure
Policy coverage even after his death.

Rakesh wants to save for his child's education

Endowment and also secure their future in case of his
Assurance If you want both savings untimely demise, he chooses Endowment
Policy and insurance benefits Assurance Policy.

Convertible If you want flexibility in Rakesh is unsure about his future financial
Whole Life changing the policy type needs and wants the option to switch to
Policy another policy type later, he chooses

10
 Convertible Whole Life Policy.

Joint Life If you want to cover Rakesh and his wife want to take a policy that
Assurance multiple people under a covers both of them, they choose Joint Life
Policy single policy Assurance Policy.

If you want to receive

Anticipated periodic payments in Rakesh wants to receive regular payouts to
Endowment addition to the sum fund his retirement, he chooses the
Policy assured Anticipated Endowment Policy.

Rakesh wants to secure the future of his

When looking to secure children's education and other needs in case
Children Policy the future of children something happens to him.

Postal Life Insurance Scheme Details

The table provides a general overview of the main features of each PLI scheme. The
exact terms and conditions may vary depending on the policyholder's circumstances.

Mini Maxi
Sch Pol Mat Dea Loa
Mini Maxi mum mum
eme icy urity th n
mum mum Sum Sum
Na Te Bene Ben Fac
Age Age Assu Assur
me rm fit efit ility
red ed

11
 Sum
Whole Sum
Assured Yes
Life Rs. Rs. 50 Assured
19 years 55 years - + After 4
Assuran 20,000 Lac +
Bonuse years
ce Bonuses
s

Sum
Endow Sum
Assured Yes
ment 5-35 Rs. Rs. 50 Assured
19 years 55 years + After 3
Assuran years 20,000 Lac +
Bonuse years
ce Bonuses
s

Convert
Sum
ible Sum
Assured Yes
Whole Rs. Rs. 50 Assured
19 years 55 years - + After 4
Life 20,000 Lac +
Bonuse years
Assuran Bonuses
s
ce

Sum
Joint Sum
Assured Yes
Life 5-20 Rs. Rs. 50 Assured
21 years 45 years + After 3
Assuran years 20,000 Lac +
Bonuse years
ce Bonuses
s

Anticip 19 years 45 years 15 and Rs. Rs. 50 Anticipat Sum Yes

12
 ed
ated
payouts Assured
Endow
20 at 5-year +
ment 20,000 Lac
years intervals Bonuse
Assuran
+ Final s
ce
payment

Sum
Sum
Assured
Childre Rs. Assured
5 years 20 years - Rs. 1,000 + No
n Policy 3,00,000 +
Bonuse
Bonuses
s

Features of Postal Life Insurance Policies

1. Insurance Coverage: Postal Life Insurance provides life insurance coverage to
individuals at affordable premiums. The coverage amount depends on the policy
selected and the premium paid.
2. Premium Payment: Premium payment can be made monthly, quarterly, half-
yearly, or annually, depending on the policy terms.
3. Nomination Facility: PLI allows policyholders to nominate a beneficiary who will
receive the sum assured in the event of the policyholder's death and can also make
changes to the nomination.
4. Loan Facility: Policyholders can avail of a loan against their policy after
completing three years of the policy tenure.
5. Surrender Value: If a policyholder wants to discontinue their policy before its
maturity, they can surrender it and receive the surrender value as per policy terms.
6. Revival of Policy: If the policy lapses due to non-payment of premiums, the
policyholder can revive the policy within five years from the date of the last
premium payment.

13
7. Grace Period: Postal Life Insurance allows a grace period of one month for
premium payment. During this period, the policy remains in force, and no interest is
charged on the outstanding premium.
8. Conversion of Policy: Policyholders can convert their PLI policies into
Endowment Assurance policies or Whole Life Assurance policies after three years
of the policy tenure.
9. Free Look Period: A policyholder can cancel their policy within 15 days from the
date of receipt of the policy document and receive a refund of the premium paid.
[Link] Policy Document: In case of loss or damage to the policy document, a
policyholder can obtain a duplicate copy by submitting an application and paying
the prescribed fee.

Postal Life Insurance Scheme Bonus

PLI provides bonus payments to policyholders based on the performance of the
scheme's investments. These bonus payments are in addition to the guaranteed benefits
offered by the policy. The bonus is declared annually, and the rate of the bonus varies
based on the type of policy and the performance of the PLI fund.

The bonus is calculated as a percentage of the sum assured and is added to the policy's
accumulated savings. The accumulated bonus is paid out to the policyholder upon the
maturity of the policy or in case of the policyholder's death.

Overall, the bonus payment under the PLI scheme serves as an added benefit to
policyholders and can increase the overall value of the policy.

PLI Policy Bonus for the FY 2023-2024

Type of PLI
Bonus Rate
Scheme

Endowment
Assurance (EA) ₹52 per ₹1,000 of the sum assured amount

14
 Whole Life
Assurance (WLA) ₹76 per ₹1,000 of the sum assured amount

₹76 per ₹1,000 of the sum assured amount (for Whole Life bonus
Convertible Whole rate) However, on conversion, the applicable rate will be equal to
Life Policies the Endowment bonus rate.

Anticipated
Endowment
Assurance ₹48 per ₹1,000 of the sum assured amount

Benefits of Postal Life Insurance Policy

1. Income Tax Exemption: Premium paid towards PLI is eligible for tax exemption
under Section 80C of the Income Tax Act, 1961.
2. Low Premium Rates: PLI offers some of the most affordable premium rates in the
market.
3. Additional Facilities Offered: PLI offers several additional facilities such as loans
against the policy, surrender value, and revival of lapsed policies.
4. High Sum Assured: PLI offers a high sum assured, which is up to Rs. 50 lakhs.
5. Transferred to any Circle within India: PLI policy can be easily transferred to
any Circle within India at no additional charges.
6. Passbook Facility: PLI provides a passbook facility to policyholders to keep track
of their premium payments and policy details.
7. Discounts on advance Premium Payment: Policyholders can pay their premium
in advance for up to two years.
 A 1% of the value discount on the premium is available if you pay your premium in
advance for a six-month insurance period.

15
 A 2% of value discount on the premium is available if you pay your premium in
advance for a twelve-month insurance period.

8. Quick Claims Process: The claims process of PLI is quick and hassle-free.

9. No Medical Examination Required: PLI does not require a medical examination

for policies with a sum assured up to Rs. 5 lakhs.

Postal Life Insurance Eligibility

Postal Life Insurance (PLI) offers eligibility to various categories of individuals and
organizations. Eligible individuals include Defense Services personnel, Para Military
Forces personnel, Central and State Government employees, employees of Local
Bodies, employees of the Reserve Bank of India (RBI), graduates and diploma holders,
employees of Government-aided Educational Institutions, employees of Public Sector
Undertakings, employees of Nationalized Banks and Financial Institutions, employees
of Autonomous Bodies, contract-based employees in Central/State Government,
employees of all Scheduled Commercial Banks, Extra Departmental Agents in the
Department of Posts, and employees of accredited Educational Institutes.

In addition to individuals, certain organizations and entities are also eligible for PLI.
These include Credit Co-operative Societies and other Co-operative Societies
registered with the Government under the Co-operative Societies Act, which are partly
or fully funded by the State Government, Central Government, RBI, Nationalized
Banks, State Bank of India (SBI), National Bank for Agricultural and Rural
Development (NABARD), and others. Joint ventures with a minimum 10%
government/PSU stake are also eligible for PLI.

These eligibility criteria ensure that a wide range of individuals and organisations,
including government employees, defense personnel, educational institutions, banks,
and co-operative societies, have access to Postal Life Insurance services.

Conclusion
In conclusion, Postal Life Insurance (PLI) is a popular insurance scheme offered by the
Indian Postal Service. The scheme has been designed to provide affordable life
insurance coverage to individuals, including those who reside in rural areas of India.
The post office insurance plan offers a range of policy options to choose from,
including endowment policies, whole-life policies, and term policies. PLI scheme
benefits include flexible premium payment options, tax benefits, and a loan facility.

16
 The post office insurance schemes are known for their simple application process and
quick claim settlement. Overall, Postal Life Insurance is a reliable and convenient
option for individuals looking for affordable life insurance coverage in India.

Pradhan Mantri Awas Yojana (PMAY) Scheme

Do you want to understand the Pradhan Mantri Awas Yojana (PMAY) scheme?
Learn more about the scheme, such as components of PMAY, groups eligible for
PMAY, and more through this article.

TABLE OF CONTENT
 What is the Pradhan Mantri Awas Yojana PMAY scheme?
 What are the components of the Pradhan Mantri Awas Yojana scheme?
 Which Group is Eligible for the Pradhan Mantri Awas Yojana scheme
PMAY?
In India, people living in poverty have always been victims of lack of
resourcefulness, economic deprivation, etc. Though the government has attempted
to bring welfare schemes for the betterment of such poverty-stricken people, not
much improvement could be found in the category. The urban and rural poor, two
categories, have been separately treated as per their needs by the same scheme of
Pradhan Mantri Awas Yojana regarding the housing program by the government
helping them get a house of their own. This certainly brings some stability to the

17
 lives of the poor people helping them focus on their economic betterment in other
arenas.

What is the Pradhan Mantri Awas Yojana (PMAY) scheme?

The Pradhan Mantri Awas Yojana (PMAY) scheme is a government initiative that
aims to provide affordable houses to the urban poor keeping a target of building 2
crore (20 million) houses by 31 March 2022. The two basic components of the
scheme are Pradhan Mantri Awas Yojana (Urban) (PMAY-U) for the urban poor
and Pradhan Mantri Awaas Yojana (Gramin) (PMAY-G or PMAY-R ) for the rural
[Link] has been collated with other schemes to ensure that houses have a
toilet or sanitation rooms. It also encompasses the Saubhagya Yojana electricity
connection scheme, Ujjwala Yojana LPG connection scheme, acquiring clean
drinking water, and Jan Dhan Yojana, a renowned banking facility scheme for the
poor.

What are the components of the Pradhan Mantri Awas Yojana scheme?

The two major components of the Pradhan Mantri Awas Yojana (PMAY) scheme
are:
 Pradhan Mantri Awas Yojana- Urban (PMAY-U) looks into the housing requisites
of poor urban people. The urban poor has been categorised into three sectors, which
depend upon the annual household income: (i) Economically Weaker Section
(EWS), (ii) Low-income Group (LIG) (iii) Middle Income Group (MIG).
Additionally, the slum dwellers within the urban population can also apply to the
scheme.
 Pradhan Mantri Awas Yojana- Rural (PMAY-R) has been brought in to help
economically weak families living in rural India become property owners. The
residences in such rural areas will have all the required basic facilities such as
electricity, clean water, a well-developed sewage system, a sanitation facility, etc.

Which Group is Eligible for the Pradhan Mantri Awas Yojana scheme

(PMAY)?

The following Groups are Eligible for PMAY for Pradhan Mantri Awas Yojana
(PMAY):
1. The people benefitting should not be more than 70 years of age.
2. The income limit for various groups within the eligible is:
3. EWS (Economical Weaker Section) – ₹3 lakhs per annum
18
4. LIG (Lower Income Group) Family – ₹6 Lakhs per annum
5. Middle Income Group -(MIG-I) – ₹6 lakhs to ₹12 lakhs per annum
6. Middle Income Group – (MIG-II) ₹12 lakhs to ₹18 lakhs per annum
The people enrolled in the scheme should not have their own house in the name of
any family member in any part of India.
The person eligible for applying for a loan should not have taken benefit of any
central/state government subsidy or help buy a home under the scheme being
discussed.
In the current period, the loan available should not own any house or land under
their name or conjoined with any family members.
The house rebuilding and self-construction loans would be granted only for
Economically Weaker Sections and Lower Income Group categories.
Under this scheme, the houses handed over would be owned by females or in
conjoined form with males.
Conclusion

The scheme Pradhan Mantri Awas Yojana very well aims to facilitate providing
one’s own house to every poor and their family. The scheme tries to bring in all the
possible beneficiaries within the range and provide them with the need. Not just the
government but also private contributors facilitate loan availability for the needy.
Such contributors are IIFL Home loans, ICICI bank, AU Housing Finance Limited,
Home First Finance company, etc. Site selection for the scheme project of house
construction is made by the states in association with the Central government while
giving priority to district headquarters, cities of religious importance, historical and
tourist importance, keeping in mind the growth of the city, slums within the city and
dominance of Scheduled Caste, Scheduled Tribe, minorities and other weaker and
vulnerable section of the society.

19
What is the Housing For All Scheme?
The Housing for All scheme was an initiative of the Indian government to establish
housing facilities for slum dwellers. It was introduced by the Indian government’s
Ministry of Housing and urban poverty Alleviation. This is also known as the
Pradhan Mantri Awas Yojana. It is for both people residing in urban and rural areas
that fulfill certain criteria.

All competitive exam aspirants can refer to the List of Government Schemes in
India at the linked article and get updated with the latest policies, schemes, and
initiatives introduced by the central and state governments of the country.

Latest Update:

 A virtual event was conducted on June 25, 2021, to mark 6 years of

successful completion of the three transformative Urban Missions vis. Smart
Cities Mission (SCM), Atal Mission for Urban Rejuvenation and Urban
Transformation (AMRUT), and Pradhan Mantri Awas Yojana-Urban
(PMAY-U)
 A short movie that encapsulated the Mission’s journey of six glorious years
was showcased during the event, that focussed on the various achievements
under the scheme, in line with the vision of Prime Minister- ‘Housing for All’
by 2022
Discussed further below in this article are the important aspects of the Housing for
All scheme, along with the latest developments done under PMAY. This
information is important from the perspective of the upcoming IAS exam and other
government examinations.

20
How to apply for PMAY Scheme?
To apply for the PMAY scheme, you can follow the step mentioned below:

1. Got to the homepage of the PMAY ([Link])

2. Click on the Citizenship Assessment section on the top navigation bar.
3. Select the relevant option as required
4. Enter the Aadhar number and name
5. You will be redirected to the application page. Fill and save the application.
6. Later, you can check the status of the application on the main website.

Who are eligible for PMAY scheme?

Eligibility for PMAY scheme are mentioned below:

 The maximum age limit of the beneficiary is 70 years.

 The beneficiary should have a family that comprises of husband, wife and
unmarried children.
 The beneficiary should not own a Pucca House either in their names or in the
name of any member of the family in any state of India.
 The annual income should be between 3 lakhs to 6 lakhs if the beneficiary is
from LIG (Low Income Group).
 Membership of one adult female member of the family is mandatory in
ownership of the house.
Candidates can read in detail about various important topics linked below for their
UPSC exam preparation –

UJALA scheme UDAY scheme Urban Planning and Development in

India

SVAMITVA Sustainable Development Pradhan Mantri Ujjwala Yojana

Scheme Goals

21
Is the PMAY scheme applicable to rural areas?
Yes, this scheme can be availed by people residing in rural areas. This can be
availed under the Pradhan Mantri Awas Yojana – Gramin scheme.

Pradhan Mantri Awas Yojana – Urban (PMAY): Latest Development &

Achievement
The success of the Mission can be attributed to its robust financial model of which,
Direct Benefit Transfer has been a key element

On June 25, 2021, the Ministry of Housing and Urban Affairs (MoHUA) released
the till date development and progress made under the Pradhan Mantri Awas
Yojana, on completion of six years of the scheme. The following data was released
by the government authorities:

 Acknowledging the diversity in housing demand across various income

groups of the country, for the first time interest subsidies on home loans have
been given to Middle-Income Groups having annual income of up to Rs.18
Lakh under PMAY-U’s Credit Linked Subsidy Scheme (CLSS). Nearly 16
lakh beneficiaries belonging to Economically Weaker Sections (EWS),
Lower Income Group (LIG), and MIG have so far been brought under the
fold of CLSS
 Due to the current investment being made in the housing sector, it has created
almost an estimated 689 crore person-days of employment translating into
around 246 lakh jobs, and led to the consumption of 370 Lakh metric -ton of
cement and 84 Lakh metric-ton of steel
 A Global Housing Technology Challenge India (GHTC-India) was
introduced in 2019 to identify and mainstream globally best available proven
construction technologies that are sustainable, green and disaster-resilient.
Following which, on January 1, 2021, the foundation of six Light House
Projects (LHPs) was laid by PM Narendra Modi, which are being built under
PMAY-U
 In view of the COIVD-19 pandemic, Affordable Rental Housing Complexes
(ARHCs), a sub-scheme under PMAY(U) for urban migrants/ poor was
launched by MoHUA. Investment under ARHCs is expected to create 11.74
crore person-days of employment with 3.89 crores direct and 7.84 crores
indirect in nature. In terms of jobs, it works out to be a total of 4.19 1akh with
1.39 lakh direct and 2.80 lakh indirect jobs.

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  ANGIKAAR, a campaign for social change management was initiated by the
‘Housing for All’ (HFA) Mission on 29th August 2019. It has achieved the
objective to build capacities of PMAY -U beneficiaries in adapting to change
though door-to-door awareness on best practices in water & energy
conservation, health, hygiene, sanitation and financial literacy

Candidates must also go through the detailed UPSC Syllabus for the prelims and
mains examination and accordingly start their IAS exam preparation.

For the latest exam updates, study material, and preparation tips visit BYJU’S.

Pradhan Mantri Awas Yojana-Urban

GS Paper - 2

 Poverty
 Welfare Schemes
 Government Policies & Interventions
 Issues Relating to Development
For Prelims: Pradhan Mantri Awas Yojana (PMAY)- Urban, Geotagging

For Mains: PMAY-U, Welfare Schemes, Government Policies and Interventions

Why in News?

Recently, Pradhan Mantri Awas Yojana (PMAY)- Urban has completed seven
years of successful implementation.

 With a total investment of Rs 8.31 Lakh Crore, PMAY-U has so far

sanctioned 122.69 lakh houses, out of which more than 1 crore houses have
been grounded and over 61 lakh houses have been completed and delivered to
the beneficiaries.

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What is Pradhan Mantri Awas Yojana-Urban?

 About:
o Pradhan Mantri Awas Yojana (PMAY) falls under the Government’s
mission - Housing for All by 2022 for urban housing being implemented
by the Ministry of Housing and Urban Affairs (MoHUA).
o It makes home loans affordable for the urban poor by providing a
subsidy on the Interest Rate of a home loan during repayment by way
of EMI (Equated Monthly Installments).
 Beneficiaries:
o The Mission addresses urban housing shortage among the EWS/LIG
and MIG categories including the slum dwellers.
 Economically Weaker Section (EWS) - with a maximum annual
family income of Rs. 3,00,000.

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  Low Income Group (LIG) - with maximum annual family income of
Rs. 6,00,000) and
 Middle Income Groups (MIG I & II) - with a maximum annual
family income of Rs. 18,00,000)
 A beneficiary family will comprise husband, wife, unmarried sons
and/or unmarried daughters.
 Four Verticals of PMAY-U:
o In Situ Slum Redevelopment (ISSR):
 This vertical will be implemented with the concept “Land as a
resource” with private sector participation for providing houses to
eligible slum dwellers.
 Slum: It is a compact area of at least 300 people or about 60 - 70
households of poorly built congested tenements in an unhygienic
environment usually with inadequate infrastructure and lacking
in proper sanitary and drinking water facilities
o Affordable Housing through Credit Linked Subsidy (CLSS):
 Beneficiaries of EWS, LIG, MIG (I &II) seeking housing loans
from Banks, Housing Finance Companies and other such institutions
for acquiring, new construction or enhancement of houses are eligible
for an interest subsidy of:
 6.5% on loan amount up to Rs. 6 Lakh
 4% on loan amount up to Rs. 9 Lakh
 3% on loan amount up to Rs. 12 Lakh
o Affordable Housing Through Partnership (AHP):
 An affordable housing project can be a mix of houses for different
categories but it will be eligible for Central Assistance, if at least
35% of the houses in the project are in the EWS category.
o Beneficiary-led individual house construction (BLC):
 Central Assistance up to Rs. 1.5 lakh per EWS house is provided
to eligible families belonging to EWS categories for individual house
construction/ enhancement.
 Demand-driven Approach:

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 o PMAY-U adopts a demand-driven approach strengthening the ethos of
cooperative federalism, housing shortage is decided based on demand
assessment by States/Union Territories (UTs).
o The Mission is implemented as a Centrally Sponsored Scheme (CSS)
except the CLSS vertical of the PMAY-U which is being implemented as
a Central Sector Scheme.
 Central Sector Schemes are 100% funded by the Union
government and implemented by the Central Government
machinery.
 Centrally Sponsored Scheme (CSS) a certain percentage of the
funding is borne by the States and the implementation is by the
State Governments.
 Geotagging:
o Geotagging is a process of adding geographical identification to various
media like photography.
 Under the PMAY-U guidelines, it is mandatory for the state
government to ensure that all houses built under the scheme are
geotagged to the Bhuvan HFA (housing for all) application.
 Bhuvan is an Indian Geo Platform developed by the Indian
Space Research Organisation (ISRO).
 It is a web-based application which allows users to access
various map related services.
 Women Empowerment:
o The Mission promotes Woman Empowerment by providing the
ownership of houses in the name of a female member or in joint
names.
o Preference is also given to women (with overriding preference to
widows, single women), persons belonging to Scheduled
Castes/Scheduled Tribes/Other Backward Classes, Minorities, Persons
with disabilities and Transgender.
 Initiatives under PMAY-U:
o Affordable Rental Housing Complexes (ARHCs) :
 It is a sub-scheme under PMAY-U.

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  This will provide ease of living to urban migrants/ poor in the
Industrial Sector as well as in non-formal urban economies to get
access to dignified affordable rental housing close to their
workplace.
o Global Housing Technology Challenge :
 It aims to identify and mainstream a basket of innovative
construction technologies from across the globe for the housing
construction sector that are sustainable, eco-friendly and disaster-
resilient.
o CLSS Awas Portal (CLAP):
 It is a common platform where all stakeholders i.e., MoHUA,
Central Nodal Agencies, Primary Lending Institutions,
Beneficiaries and Citizens are integrated in a real-time environment.
 The portal facilitates processing of applications along with tracking
of subsidy status by beneficiaries.

Pradhan Mantri Awas Yojana

Content

 What is Pradhan Mantri Awas Yojana?

 Objective of PM Awas Yojana
 Features of the PMAY Scheme
 Type of PMAY Scheme
 Income Range for Economic Groups under PMAY Housing Scheme
 Pradhan Mantri Awas Yojana Scheme Details Urban
 Offers and Advantages of PMAY-Gramin
 Pradhan Mantri Awas Yojana Eligibility Criteria
 How to Apply for the PMAY Scheme
 Documents Required for Pradhan Mantri Awas Yojana
 Tax Benefits under PMAY
The Pradhan Mantri Awas Yojana is government-backed housing finance in India.
The affordable housing scheme was launched on 1 June 2015. Initially, the last date

27
for availing of the scheme was 31 March 2022.
But the date has been extended to 31 December 2024. Dive into this article to
gather important details about the Pradhan Mantri Awas Yojana scheme.

What is Pradhan Mantri Awas Yojana?

The PMAY is a CLSS or a Credit Linked Subsidy Scheme. Therefore, any availing
of the PMAY scheme will get a housing subsidy. But it is available only when an
individual is buying or constructing a new house.
The Awas Yojana scheme has an interest rate of up to 6.50% per annum. The
maximum tenure for the housing scheme is 20 years.

Objective of PM Awas Yojana

The objective of the scheme is to offer affordable housing for all. The scheme is
particularly targeted at offering sustainable and affordable housing for the poor and
low-income groups. The scheme will also favour minorities, including the
transgender community and widows from low-income groups. The Pradhan Mantri
Awas Yojana makes it possible with a lower interest rate than other home loans.

Features of the PMAY Scheme

The different features of PMAY are as follows:

● A subsidy interest rate of 6.50% per annum is charged on housing loans for 20
years.
● Eco-friendly and sustainable technologies will be used to construct homes
under this scheme.
● The PMAY scheme will cover the overall urban areas in the country, including
4041 statutory towns. The scheme will prioritise 500 Class 1 cities for building
houses. The construction will be done in three stages.
● Senior citizens and differently-abled individuals are given the preference of
ground floors.
● The Pradhan Mantri Awas Yojana scheme will be implemented in all statutory
towns in India from the initial stages.

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Type of PMAY Scheme

The PM Awas Yojana is not restricted to the bigger towns and cities in India.
Slums, villages, and other rural areas are also included under this scheme. The two
types of PMAY schemes are as follows:

1. Pradhan Mantri Awas Yojana Gramin

The PMAY-G (Gramin) is for families under the Economically Weaker Sections
and Lower Income Groups. It ensures that they can find affordable financing to
build their homes.

2. Pradhan Mantri Awas Yojana Urban

The PMAY-U (Urban) scheme includes around 4,300 towns and cities in India. The
urban scheme includes various developmental authorities for planning across urban
centres.

Income Range for Economic Groups under PMAY Housing Scheme

Before applying for the PM Awas Yojana scheme, applicants should consider
whether they are eligible for the subsidy. The entire family's income is calculated to
determine the eligibility for subsidy. The different income sources that are
considered include jobs, investments, and more.

The eligible income range for different economic groups under the low-cost
housing scheme is as follows:

Economic Group Annual Income Range Available Subsidy

EWS Up to Rs 3 lakh 6.5%

LIG Rs 3 lakh to Rs 6 lakh 6.5%

MIG I Rs 6 lakh to Rs 12 lakh 4%

MIG II Rs 12 lakh to Rs 18 3%
lakh

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Families with an annual income above Rs 18 lakh are not eligible for the Pradhan
Mantri Awas Yojana scheme.

Pradhan Mantri Awas Yojana Scheme Details Urban

The details of the Pradhan Mantri Awas Yojana urban scheme are as follows:

Benefits MIG-I MIG-II

Interest rate subsidy 4% 3%

Maximum subsidy amount Rs 2.35 lakh Rs 2.30 lakhs

Maximum home loan tenure 20 years 20 years

Maximum home loan quantum for subsidy Rs 9 lakh Rs 12 lakh

The discount rate for interest subsidy 9% 9%

NPV

Maximum carpet area 160 sq. m 200 sq. m

Offers and Advantages of PMAY-Gramin

The different advantages of the PMAY rural housing scheme are as follows:

Benefits EWS LIG

Interest rate subsidy 6.5% 6.5%

Maximum subsidy amount Rs 2.67 lakh Rs 2.67 lakh

Maximum home loan tenure 20 years 20 years

Maximum home loan quantum for subsidy Rs 6 lakh Rs 6 lakh

The discount rate for interest subsidy 9% 9%

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NPV

Maximum carpet area 30 sq. m 60 sq. m

Pradhan Mantri Awas Yojana Eligibility Criteria

The different eligibility criteria under the government housing scheme are as
follows:

● The annual income range of a family should be below Rs 18 lakh to be eligible

for the scheme. According to the income range of families, they are divided into
EWS, LIG, and MIG categories.
● The PMAY scheme is available only for buying or constructing new properties.
Moreover, the applicant cannot own any pucca properties while applying for this
scheme.
● The property papers or the deed should contain a woman's name. In a sole
proprietorship, the woman must own the house. If it's joint ownership, one of the
owners must be a woman. This rule can be avoided only when there are no female
members in the family.
● Only those who haven't availed of any benefits from the central government or
any other housing finance scheme from the state or the central government will be
eligible.
● The benefits from the scheme are available only once. If you have already
availed of the benefits, you cannot apply for it to buy another house.
● The house or property purchase must take place in one of the cities, towns, or
villages in India, according to the Census.
● If the reason for applying for a home loan is an extension or renovation of an
existing property, the work must be completed within 36 months of getting the first
loan instalment.

How to Apply for the PMAY Scheme

The steps to apply for the PMAY scheme are as follows:

31
● Step 1: Open the official central government website of the Pradhan Mantri
Awas Yojana scheme.
● Step 2: Locate the Menu tab and select the Citizen Assessment option.
● Step 3: Enter your Aadhaar number to continue with the process.
● Step 4: After successfully entering the Aadhaar number, the application page
will open on your screen.
● Step 5: You will have to enter all the necessary details on this page, including
your income details, bank account details, personal details, and more.
● Step 6: Before submitting the application, check all the details that you have
entered carefully.
● Step 7: A unique application number will be generated for you after hitting the
Save option.
● Step 8: Next, download the filled-up application form for future reference.
● Step 9: You can deposit the form at your nearest CSC office or any financial
institution offering PMAY. You will also have to submit all the required documents
with the application form.
If you are not comfortable applying for the PMAY scheme online, you can easily
apply through an offline procedure. For that, you will have to visit an authorised
financial institution that offers the PMAY scheme.

Documents Required for Pradhan Mantri Awas Yojana

The different documents required for the Pradhan Mantri Awas Yojana will differ
for salaried and self-employed applicants.

The documents required for salaried applicants are as follows:

● Application form
● Identity proof: PAN card is mandatory. Apart from that, applicants should
provide other identity proof like a Voter ID card, Aadhaar card, driving licence, and
passport.
● Address proof: Voter ID card, Aadhaar card, valid passport, utility bills, bank
account statements, or property tax receipts.
● Income proof: ITR or Form 16, last 2 months' salary slip, and 6 months' bank
statement
● Property documents: Agreement to sell, a chain of required property

32
documents, buyer agreement or allotment letter, and receipts related to payments
made to the developer.
The documents required for self-employed applicants are as follows:
● Address proof of business: It can include a PAN card, VAT registration
certificate, shops and establishment certificate, SEBI registration certification, etc.
● Income proof: It can include the ITR for the last two years, the balance sheet,
or the profit and loss statement.
Applicants also need to submit the last six months' bank account statements of their
business and personal accounts.
Apart from that, self-employed applicants will have to submit all the documents the
same as salaried applicants.

Tax Benefits under PMAY

The different tax benefits available under the Pradhan Mantri Awas Yojana scheme
are as follows:
● Under section 80C, applicants enjoy a deduction of up to Rs 1.5 lakh annually
on the principal repayment amount.
● Section 24(b) enables applicants to enjoy deductions of up to Rs 2 lakhs on the
interest payment.
● Section 80EE enables first-time homebuyers to enjoy an annual tax exemption
of up to Rs 50,000.
● According to Section 80EEA, applicants can enjoy deductions of up to Rs 1.5
lakh on interest payments.

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