What is the credit-linked subsidy scheme (CLSS)?

The Credit Linked Subsidy Scheme is a central government housing initiative under PMAY that offered interest subsidies on home loans to eligible urban households. It was designed for EWS, LIG, and later MIG categories to make housing affordable. The subsidy was applied upfront on the loan principal, reducing EMIs. CLSS aimed to promote home ownership by lowering borrowing costs for low- and middle-income families.

What documents are required for the PMAY subsidy?

Applicants need identity proof such as Aadhaar and PAN, address proof, income documents like salary slips or ITRs, and bank statements. Property-related papers and self-declarations confirming no existing pucca house are also required. Bank details and consent for Aadhaar linking and DBT are mandatory. While some requirements differ slightly between PMAY-Urban and PMAY-Rural, the basic documents remain similar.

What is the last date for home loan subsidy 2025?

The PMAY mission was originally scheduled to end on 31 March 2022. However, the government extended the deadline until 31 December 2025 for completing houses that were already sanctioned before March 2022. This extension does not alter the funding structure or implementation method but allows time for approved projects to be completed.

How do I track my CLSS status?

To check CLSS status, visit the official PMAY CLAP portal and click on the CLSS Tracker option. Enter the Application ID provided during submission. After verification, the system displays the current stage of your application, including approval, subsidy processing, or disbursement details, if applicable.

Can I apply for PMAY myself?

Yes, individuals can apply for PMAY on their own through the official online portal. Alternatively, applications can also be submitted through banks or financial institutions that participate in PMAY and offer home loans under the scheme.

What is the 2.50 lakh subsidy?

The Rs. 2.5 lakh subsidy generally refers to the financial assistance offered under PMAY-Urban 2.0 for eligible families. This amount may be provided for building a house on owned land, affordable housing projects, or as part of an interest subsidy on home loans, depending on the category and scheme guidelines.

Is PMAY available today?

Yes, PMAY is active in 2025. The Urban component, PMAY-U 2.0, has been extended until 2029. It continues to focus on affordable housing for EWS, LIG, and MIG families through financial assistance, construction support, and interest-related benefits, depending on the applicable scheme.

What was the primary objective of the Credit Linked Subsidy Scheme (CLSS)?

The main aim of CLSS was to make urban housing affordable by reducing home loan interest costs for low- and middle-income families. By offering an upfront interest subsidy, the scheme helped lower EMIs and encouraged first-time home ownership under the broader “Housing for All” mission.

Is the CLSS scheme still active and accepting applications?

No, the CLSS scheme is no longer accepting new applications. The subsidy for MIG categories ended on 31 March 2021, while EWS and LIG benefits concluded on 31 March 2022. Applications approved before these deadlines continue to be processed as per guidelines.

Which income groups were eligible to benefit from the CLSS?

CLSS covered four income categories. EWS households had annual incomes up to Rs. 3 lakh. LIG applicants earned between Rs. 3 lakh and Rs. 6 lakh. MIG I covered incomes from Rs. 6 lakh to Rs. 12 lakh, while MIG II included households earning between Rs. 12 lakh and Rs. 18 lakh annually.

How did the subsidy amount reduce the actual loan burden for beneficiaries?

The subsidy was credited as a lump sum directly to the home loan account shortly after loan disbursement. This reduced the outstanding principal amount, which in turn lowered the EMI and overall interest payable across the loan tenure, offering immediate financial relief.

What was the maximum amount of interest subsidy an applicant could receive under CLSS?

The subsidy amount varied by income group. EWS and LIG beneficiaries could receive up to approximately Rs. 2.67 lakh. MIG I applicants were eligible for around Rs. 2.35 lakh, while MIG II applicants could receive close to Rs. 2.30 lakh, based on approved loan limits and interest rates.

Were there any restrictions on the size of the house purchased under the scheme?

Yes, CLSS specified carpet area limits to ensure affordability. EWS homes were limited to 30 square metres, LIG homes to 60 square metres, MIG I homes to 160 square metres, and MIG II homes to 200 square metres.

Was it mandatory for a woman to own the property to avail the CLSS benefit?

For EWS and LIG categories, the property had to be owned or co-owned by a female family member, unless no adult woman was present. This requirement was not applicable to MIG I and MIG II applicants.

How did applicants track the status of their subsidy application?

Applicants could track their subsidy status using the CLAP portal by entering their Application ID. The portal displayed progress updates, verification stages, and subsidy disbursement details, providing transparency throughout the process.

Can I still apply for a government home loan subsidy now that CLSS is closed?

While CLSS is closed, the government has introduced new housing initiatives under PMAY 2.0. Interested homebuyers should review the latest announcements and guidelines from the Ministry of Housing or consult banks to learn about currently active subsidy options. Even without government subsidies, you can access affordable home financing with competitive interest rates. Bajaj Finserv offers rates starting at 7.45%* p.a, loan amounts up to Rs. 15 Crore*, and flexible repayment options up to 32 years. Check your loan offers from Bajaj Finserv for your dream home. You may already be eligible, find out by entering your mobile number and OTP.

What role did banks or HFCs play in the CLSS process?

Banks and Housing Finance Companies acted as Primary Lending Institutions. They sanctioned home loans, verified eligibility, and processed subsidy claims through Central Nodal Agencies like NHB and HUDCO. Their role ensured smooth coordination between borrowers and government authorities. When choosing a housing finance company for your home loan, consider lenders who offer transparent processes, quick approvals, and customer-friendly terms. Bajaj Finserv provides hassle-free home loans with approval in 48 hours*, no foreclosure charges for individual floating rate borrowers, and balance transfer facilities with top-up loans up to Rs. 1 crore. Check your eligibility for a home loan from Bajaj Finserv today. You may already be eligible, find out by entering your mobile number and OTP.

Credit Linked Subsidy Scheme (CLSS) - Full Form, Meaning and How It Works

3 min read

15 December 2025

In 2015, the Government of India launched a scheme that would help the financially disadvantaged population living in urban areas get access to affordable housing. .Known as the Pradhan Mantri Awas Yojana, it envisages ‘affordable housing for all’ by giving borrowers the financial means necessary for purchasing a home via a subsidy on the home loan interest rate. Credit Linked Subsidy Scheme (CLSS) is a component of PMAY under which not only economically weaker sections, but also middle-income groups can avail of home loans at reduced EMIs.

What is PMAY CLSS (Credit Linked Subsidy Scheme)?

The Credit Linked Subsidy Scheme, commonly known as CLSS, is a housing support initiative introduced by the Government of India under the PMAY mission. It helps eligible homebuyers by reducing the interest burden on their home loans. This benefit is available to applicants from the EWS, LIG, and MIG I and II income categories. Instead of offering cash later, the government provides the subsidy upfront. The subsidised amount is directly adjusted against the home loan principal. As a result, the outstanding loan amount reduces, which leads to lower EMIs and less interest paid over the loan tenure, making home ownership more manageable.

Key benefits of CLSS for homebuyers

Reduced interest leads to smaller EMIs: One of the biggest advantages of CLSS is the interest subsidy offered on home loans. Depending on your income category, the subsidy can be as high as 6.5% on a loan portion of up to Rs. 6 lakh. For EWS and LIG applicants, this benefit can translate into savings of up to Rs. 2.67 lakh over the loan period. Since the subsidy lowers the principal amount at the start, your monthly EMIs become lighter, helping you manage finances more comfortably.
Improves overall housing affordability: Lower EMIs improve your loan eligibility and purchasing power. With reduced repayment pressure, you may be able to consider a better home, choose a more convenient location, or allocate funds for essential fittings and interiors. CLSS helps buyers stay within budget while still meeting their housing needs.
Supports early home ownership: CLSS is especially helpful for young professionals and first-time buyers who may not have large savings. By reducing loan costs, the scheme enables families to buy a home earlier instead of delaying plans for years. This offers financial stability and a valuable long-term asset.

If you are planning to buy a home and want to explore competitive financing options beyond government schemes, Bajaj Finserv offers attractive interest rates starting at 7.45%* p.a with flexible repayment tenures up to 32 years. Check your eligibility today. You may already be eligible, find out by entering your mobile number and OTP.

Upfront benefit without follow-ups: Unlike tax refunds or delayed reimbursements, the CLSS subsidy is credited directly to the loan account at the beginning. There is no need to file separate claims later, and the reduced EMI benefit starts soon after approval.

Who is eligible for the Credit Linked Subsidy Scheme?

To avail CLSS benefits, individuals must fall into any of these income categories:

Economically Weaker Section or Lower Income Group - Annual income between Rs. 3 lakh and Rs. 6 lakh
Middle Income Group I - Annual income within Rs. 6 lakh - Rs. 12 lakh
Middle Income Group II - Annual income within Rs. 12 lakh - Rs. 18 lakh

Other eligibility criteria for EWS/ LIG and MIG categories

Property ownership must contain 1 female membership
A female member of the family must co-own the property
The household/ applicant should not possess any pucca house in India
Property’s location must be within the 2011 census statutory towns
Applicant should not have taken any government assistance under housing schemes previously

Apply for a home loan from Bajaj Finserv and avail subsidized rate of interest under the CLSS scheme.

CLSS for weaker sections and low-income groups

Home buyers in this category are eligible for an interest rate subsidy of 6.5% for a period of 20 years or for the entire tenor of the home loan, whichever is lower. If you belong to this category, and subsequently approach a bank or NBFC for home finance, this incentive is initially credited to your account by the lender from whom you avail the loan.

The lender then lowers the EMIs for you per the credited value. The credit so extended can be utilised not only to build a new house, but also to make additions or renovations to existing houses. Here, those who have a household income up to Rs. 3 lakh a year are clubbed under the economically weaker category while those households having an annual income of above Rs. 3 lakh to Rs. 6 lakh are classified as a low-income group. In both categories, preferential treatment will be given to women, SC/ STs, backward classes, minorities and persons with disabilities.

CLSS for middle income groups

This category of beneficiaries is split into two sections. The first section, labelled as MIG I, includes people whose household income per year ranges from Rs. 6 lakh to Rs. 12 lakh. The second section, named MIG II, includes those whose household income is Rs. 12 lakh to Rs. 18 lakh a year. The MIG I section gets an interest discount of 4%, while their MIG II counterparts can avail a reduction of 3%. The home loan tenor for both can extend up to 20 years. However, the MIG II group gets to go home with a higher home loan amount of Rs. 12 lakh compared to Rs. 9 lakh for the MIG I group.

Once you have understood the category under which you qualify for the PMAY CLSS scheme, here is how you can calculate the subsidy component on your loan.

How Interest Subsidy is Calculated under CLSS

Let us say you fall under the MIG II group and you take a home loan of Rs. 32 lakh for a tenor of 20 years. The EMI works out to be Rs. 30,881. Out of this total amount of Rs. 32 lakh, the loan amount eligible for subsidy is Rs. 12 lakh. When you include the 3% interest rate subsidy and calculate the EMI via the PMT formula on Excel, you will find that the EMI gets reduced to a little more than Rs. 6,600 per month.

To find out how much home loan EMI you will have to pay regardless of this scheme in action on your home loan use the home loan EMI calculator on lender websites, such as Bajaj Finserv. This lender allows you to conveniently get a home loan sanction up to Rs. 15 Crore* for a tenor up to 32 years* on nominal interest rates. Not only can you avail PMAY facilities as applicable on your loan sanction with Bajaj Finserv, but you also get additional benefits on your loan such as a 3 EMI holiday to make repayment more affordable. You may already be eligible, check your pre-approved offers now by entering your mobile number and OTP.

Finally, once you are sure of the Pradhan Mantri Awas Yojana eligibility, here’s how you can avail of the Pradhan Mantri Awas Yojana Credit Linked Subsidy Scheme.

How to Avail of CLSS Subsidy Scheme?

Begin by contacting the financial institutions covered under the PMAY scheme about your intention to avail a loan. They will then hand you the loan subsidy application, which you have to duly fill and submit along with the relevant documents. Upon verification, the housing loan amount will be disbursed to your bank account. Once this is done, your lender approaches the nodal agencies to start the process of injecting your bank account with the subsidy you are entitled to.

Pradhan Mantri Awas Yojana has been brought to action to add fuel to your home purchase so as to ensure that you become the homeowner on easy, flexible terms. So, find a home of your choice to get benefit from the scheme until March, 2019.

Application process

Step 01: Eligible applicants must approach a bank or financial institution that participates in the PMAY programme.
Step 02: Obtain the CLSS application form from the lender and carefully complete all required details.
Step 03: Submit the filled form along with necessary documents to the lending institution.
Step 04: After verification, the approved loan amount is credited to your bank account.
Step 05: Once the loan is disbursed, the lender forwards subsidy-related details to the concerned nodal agency.
Step 06: After confirmation, the subsidy amount is credited upfront to the loan account, reducing the principal and EMI.

Important notes

The subsidy is credited directly to the loan account through Primary Lending Institutions (PLIs), resulting in reduced EMIs.
PLIs include scheduled banks, housing finance companies, regional rural banks, cooperative banks, small finance banks, and NBFC-MFIs recognised by the Ministry.
Aadhaar details of all family members are linked to prevent duplicate benefits.

Tracking application via CLSS tracker

Applicants can check their subsidy status by visiting the CLAP portal and entering the Application ID received via SMS. An OTP is sent to the registered mobile number. After verification, the system displays the application stage, completed steps, and subsidy disbursement details, if applicable.

Central nodal agencies

National Housing Bank (NHB), HUDCO, and State Bank of India act as nodal agencies to release subsidies and monitor progress.

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Documents required

To apply for CLSS under PMAY, applicants must submit a set of documents that help verify identity, income, and property ownership. While exact requirements may differ slightly across EWS, LIG, and MIG categories, the core documents remain largely the same.

Core documents

Identity proof: Aadhaar Card (mandatory), PAN Card, Passport, Voter ID, or Driving Licence
Address proof: Aadhaar, utility bills, Passport, or Voter ID
Income proof: Salary slips, Income Tax Returns, bank statements (last 3–6 months), or income affidavit for self-employed individuals
Property documents: Sale agreement, allotment letter, possession letter, or property valuation report
Bank details: Account number, IFSC code, branch details, and recent bank statements

Category-specific and other documents

Income certificate or affidavit for EWS, LIG, or MIG classification
Caste or minority certificate, if applicable
Self-declarations confirming no existing pucca house and no prior PMAY benefit
Passport-size photographs

Once you have gathered your documents and understood government schemes, the next step is selecting a reliable lender for your home loan. Bajaj Finserv provides hassle-free doorstep document collection and processes applications with minimal branch visits. Check your eligibility for a home loan. You may already be eligible, find out by entering your mobile number and OTP.

Tracking CLSS application status

Visit the official PMAY-Urban website.
Click on the “Track Application Status” option on the homepage.
Enter your registered mobile number and proceed to search.
An OTP will be sent to your mobile number for verification.
After entering the OTP, your application details will be displayed.
The screen will show the current status as submitted, approved, rejected, sanctioned, or disbursed.
Approved applicants can view subsidy amount, bank name, and application ID.
If rejected, the system will also mention the reason for rejection.

Conclusion

The Credit Linked Subsidy Scheme under PMAY played a transformative role in making homeownership accessible to millions of urban families across income categories. By offering upfront interest subsidies, CLSS significantly reduced the financial burden of home loans, enabling families from economically weaker sections to middle-income groups to purchase their first homes. Though the scheme is no longer accepting new applications, its impact continues through ongoing disbursements for approved cases. The initiative demonstrated how targeted government support can bridge the affordability gap in housing. As India moves forward with PMAY 2.0 and other housing missions, the lessons learned from CLSS remain valuable. For those planning to buy a home today, understanding past schemes helps in making informed financing decisions.

While government subsidy schemes have specific eligibility criteria and timelines, you can still access affordable home financing through competitive lenders. Bajaj Finserv offers loans up to Rs. 15 Crore* with interest rates starting at 7.45%* p.a, flexible tenures up to 32 years, and quick approval within 48 hours*. Check your eligibility now. You may already be eligible, find out by entering your mobile number and OTP.

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