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Credit Linked Subsidy Scheme (CLSS) in India: Benefits, Eligibility & How It Works

Q: How long does the CLSS subsidy last?

The maximum loan tenure under the CLSS scheme is up to 20 years. The actual tenure will vary depending on your preference and your agreement with the loan lender.

Q: Can I get CLSS if I already own a house elsewhere?

No. Existing homeowners in India cannot apply for CLSS scheme . This scheme aims to promote first-time home ownership for eligible families only.

Q: What is the maximum loan amount eligible for CLSS subsidies?

The maximum loan amount under CLSS scheme varies based on income categories. For EWS/LIG, it is up to ₹6 lakhs, for MIG-I, ₹9 lakhs, for MIG-II, ₹12 lakhs.

Q: How does CLSS affect my home loan EMI?

With credit linked subsidy meaning , the government pays a part of the interest and reduces the loan principal. As a result, your home loan EMI is lowered.

Q: Are there any restrictions on the area of the house I can buy with CLSS?

CLSS scheme area restrictions vary based on the income categories (EWS, LIG, MIG-I, MIG-II), starting from 30 sq. m. up till 200 sq. m.

By Tata Capital
08 January 2026
9 mins read
2513

Credit Linked Subsidy Scheme (CLSS) in India: Benefits, Eligibility & How It Works

Let’s face it! Skyrocketing property prices in India often keep homes out of buyers’ reach. As a result, the affordable housing sector has risen in popularity these past years, providing economical housing options for house-hunters.

Add to it the introduction of the Pradhan Mantri Awas Yojana (PMAY) scheme, which seeks to make housing affordable to all and aims to build two million houses by the end of 2022. Among the various sub-schemes that PMAY features, the Credit Linked Subsidy Scheme offers subsidies not only to economically weaker sections (EWS) but to low-income groups (LIGs) and middle-income groups (MIGs) as well.

If you are wondering what is credit linked subsidy meaning and what is credit-linked subsidy scheme? Read on to find out.

What is the CLSS Scheme?

The CLSS or Credit Linked Subsidy Scheme is the only scheme under the PMAY (Urban) directly implemented by the central government. Under credit linked subsidy meaning, the government provides a direct subsidy on housing loan interest rates to the various beneficiaries of this scheme.

CLSS Beneficiaries: EWS, LIG & MIG Eligibility Criteria

Based on the annual household income, the following four categories can avail the CLSS scheme:

EWS or Economically Weaker Section: Households with annual income under Rs. 3 lakhs
LIG or Low Income Group: Households with annual income between Rs. 3 lakhs and Rs. 6 lakhs
MIG I or Middle Income Group I: Households with annual income between Rs. 6 lakhs and Rs. 12 lakhs
MIG II or Middle Income Group II: Households with annual income between Rs. 12 lakhs and Rs. 18 lakhs

How CLSS Works: Subsidy Calculation & Loan Impact

Pondering over how a credit-linked subsidy scheme works? We have you covered.

Credit linked subsidy meaning allows homebuyers to get interest rate concessions of 3-6.5% on the loan amount, depending on the category of the beneficiaries they fall under. This subsidy is calculated over the entire period of the loan and is capped at Rs. 2.67 lakhs.

The concession offered is directly deducted from your loan’s outstanding principal amount. As the principal amount reduces, so does the size of EMIs. To avail of the subsidy, all eligible borrowers must declare their income and submit the title of the property they wish to buy. Once your lender verifies the details, the subsidy is credited to your loan account, lowering your EMIs.

CLSS Benefits for EWS & LIG: Interest Subsidy Details

When asking what is CLSS scheme’s benefits, understand that they depend on income sections. Beneficiaries of the Economically Weaker Section (EWS) and Low Income Group (LIG) seeking housing loans from Banks, Housing Finance Companies and other such institutions would be eligible for an interest subsidy at the rate of 6.5% for a tenure of 20 years or during the tenure of loan whichever is lower. They receive the direct subsidy, which is the key PMAY CLSS benefit.

The credit-linked subsidy scheme meant for these groups will be available only for loan amounts upto Rs. 6 lakhs. But any additional loans beyond Rs. 6 lakhs will be at a nonsubsidized rate.

The credit-linked subsidy will also be applicable for housing loans taken for new construction and the addition of toilets, rooms etc. to existing homes.

The carpet area of houses being constructed under the CLSS should be upto 30 square metres and 60 square metres for EWS and LIG, respectively. While the beneficiary can build a house in a larger area, the subsidy would be limited to the first Rs. 6 lakh only.

CLSS for MIG I & MIG II: Subsidy Rates & Loan Limits

In the MIG-I, an interest subsidy of 4% is provided for loan amounts up to Rs. 9 lakhs. On the other hand, in MIG-II, an interest subsidy of 3% is provided for a loan amount of Rs. 12 lakhs.

The interest subsidy is calculated at a rate of 9% NPV over the tenure which can be a maximum of 20 years. Housing loans above Rs. 9 lakh and Rs. 12 lakhs will be at non-subsidized rates.

CLSS for MIG I and MIG II supports a carpet area of 160 square meters and 200 square meters carpet area as per income eligibility

PMAY CLSS Eligibility: Income Limits & Documentation

Here are the PMAY eligibility criteria that one must fulfil to enjoy the scheme’s benefits:

An applicant/household must not own a pucca house in any part of India, either in their name or any of their family member’s name
An applicant must not be registered under any central/state housing scheme
A female member of the family must be a co-owner of the property
The property must be located in one of the towns or adjacent areas listed in the 2011 census

Also, read –What is Subsidy: Meaning, Types, Categories and Business Scheme

How to Apply for CLSS Subsidy: Step-by-Step Process

Applying for the Credit Linked Subsidy Scheme (CLSS) under the PMAY scheme is an easy process. Before applying, ensure your eligibility, and get in touch with a lender that is part of the PMAY-CLSS network. A person can follow these steps to avail the subsidy:

Visit the official PMAY website: http://pmaymis.gov.in.
Click on the ‘Citizen Assessment’ option that you can find under the ‘Menu’ tab on the homepage.
Select ‘Benefit under 3 other components’ to proceed.
Enter the Aadhaar number and the name as mentioned on the Aadhaar card.
After verification, the applicant is redirected to the application page.
Fill in all required details, including personal information, income details, and contact information.
Read the disclaimer, enter the Captcha code, and click ‘Save’.
Print the completed application form for submission.

You can also apply for the scheme offline at Common Service Centres (CSCs) authorised by the government, or through a bank that participates in the scheme.

Following these steps ensures that the application is correctly submitted, helping you receive the credit linked subsidy efficiently. Next, we’ll look at the documents needed for the application.

Documents Required for CLSS Application

You might ask what is CLSS scheme’s document requirements?

Applying for the Credit Linked Subsidy Scheme (CLSS) requires submitting certain key documents. Why are they requested? These documents help verify the applicant’s identity, income, and property details, ensuring eligibility for the subsidy. When applying for CLSS, you should prepare the following:

Identity Proof: Aadhaar card, PAN card, Voter ID, Passport, or Driving License.
Address Proof: This can be provided using utility bills, telephone bills, or rent agreement.
Income Documents: Last three months’ salary slips, latest salary statement, Form 16 provided by your employer, or income tax returns.
Property Documents: Sale agreement, allotment letter, approved plan, or title deed of the property.
Loan Documents: Loan sanction letter from the bank or financial institution; documents related to any existing loan repayment, if applicable.
Photographs: Recent photographs of the applicant and co-applicant.

Submitting these documents accurately ensures smooth processing of the CLSS application. Without these documents, there can be delays and rejections in your application. Proper verification helps you access the interest subsidy effectively, reducing your overall loan burden.

Also, read –Top Government Schemes for Startups and MSMEs in India (2026)

CLSS Subsidy Calculation Examples

To better understand credit linked subsidy meaning, consider the following calculation.

Suppose a person falls under the MIG-I category. They apply for a home loan of ₹9 lakh at an interest rate of 8.25% for a tenure of 20 years. Without any subsidy benefit, the monthly EMI for this loan would be approximately ₹7,669 (calculated based on the full loan amount and applicable interest rate).

Under CLSS scheme for MIG-I, the interest rate subsidy is capped at 4%, and the maximum subsidy amount available is ₹2.35 lakh. Once this credit subsidy is approved, the lender adjusts it against the loan principal. As a result, the effective loan amount reduces from ₹9 lakh to ₹6.65 lakh.

The EMI is then calculated on this reduced principal (instead of the original loan amount). With the revised principal value of ₹6.65 lakh, the EMI comes down to around ₹5,660. This can vary depending on the final interest rate and tenure. This reduction in EMI significantly eases the repayment burden for the applicant.

This example shows how credit linked subsidy helps make home loans more affordable. With the subsidy, both the effective loan amount and monthly instalment are lowered.

Also, read –What is a subsidized loan? Meaning, process & benefits

Tracking Your CLSS Application Status

Once you have applied for the credit subsidy, you might want to track the status of your application. Here’s everything you need to know about what is CLSS application tracking and how to do it.

1. Online

Visit pmayuclap.gov.in and click on CLSS Tracker.
Enter Application ID and click Get Status.
Verify request using OTP and view status.

2. Via UMANG App

Log in to the UMANG app and search for “Pradhan Mantri Awas Yojana”.
Go to Installment Details.
Enter the PMAY-G registration number to check credit subsidy status.

3. Offline

Contact the lending institution or call the toll-free helplines: NHB: 1800-11-3377 / 1800-11-3388, HUDCO: 1800-11-6163.

If the status shows a delay, remember that processing your application can take time. Following up on the application using helplines can help resolve any pending issues that you might have.

Common CLSS Application Mistakes to Avoid

When applying for the credit subsidy, what is CLSS application mistakes? Let’s take a look.

Incorrect Group Selection

Selecting the wrong category (EWS, LIG, MIG-I, MIG-II) can disqualify you.

Ownership of Existing Property

Applicants or immediate family members owning a pucca house are ineligible for CLSS scheme.

Previous Subsidy Benefits

Those who have availed similar housing benefits cannot apply for credit subsidy again.

Applying for Ineligible Property Types

Resale properties do not qualify for the credit linked subsidy.

Incorrect or Incomplete Documentation

Missing or inaccurate documents, such as income proof, identity, or property papers, can result in rejection.

Spousal and Name Issues

Only one spouse can claim the subsidy. All names on the application must match official identity documents.

Property and Income Mismatch

Properties exceeding size limits, or any income discrepancies, also can lead to rejection.

Be careful to avoid these common mistakes, so that your application process proceeds smoothly.

Get CLSS Benefits with Tata Capital: Home Loan Application Guide

Now that you know what is CLSS scheme you can enjoy its rewarding benefits and own your dream home with ease. If you are an eligible beneficiary, you can apply for home loan with Tata Capital. Along with the subsidised rate, you also get repayment flexibility, structured EMI plans, a seamless application process, and quick loan disbursals.

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FAQs

How long does the CLSS subsidy last?

The maximum loan tenure under the CLSS scheme is up to 20 years. The actual tenure will vary depending on your preference and your agreement with the loan lender.

Can I get CLSS if I already own a house elsewhere?

No. Existing homeowners in India cannot apply for CLSS scheme. This scheme aims to promote first-time home ownership for eligible families only.

What is the maximum loan amount eligible for CLSS subsidies?

The maximum loan amount under CLSS scheme varies based on income categories. For EWS/LIG, it is up to ₹6 lakhs, for MIG-I, ₹9 lakhs, for MIG-II, ₹12 lakhs.

How does CLSS affect my home loan EMI?

With credit linked subsidy meaning, the government pays a part of the interest and reduces the loan principal. As a result, your home loan EMI is lowered.

Are there any restrictions on the area of the house I can buy with CLSS?

CLSS scheme area restrictions vary based on the income categories (EWS, LIG, MIG-I, MIG-II), starting from 30 sq. m. up till 200 sq. m.

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