Women have faced discrimination at every level in India since time immemorial. Ironically, she is called a homemaker but at the same time it is difficult for her to obtain a Home Loan. Banks and financial institutions have different views as far as male and female borrowers are concerned. Fortunately, with many of the top banking personnel being women today, there is a paradigm shift in the viewpoints today.
Successive governments have made it easy and attractive for women to obtain Home Loans. These measures constitute a reduction in interest rates and increased exemptions in income tax. The present government led by Shri Narendra Modi has announced a special Housing Loan program, the Pradhan Mantri Awaas Yojana (PMAY). Moreover some leading banks in India like the State Bank of India has also formulated special Home Loan Alternatives for Women.
This Housing Loan program caters to people of lower income and middle-income groups, and other minorities. In addition, there is a special provision to cater to women, especially widows, single working women, persons belonging to SC/ST and other backward classes. There are also special preferences for differently abled person, women and, transgender people.
The principal objective of this scheme is to provide shelter for each individual in India by 2022.
Under this scheme, Home Loan borrowers can avail a subsidy on the Home Loan interest amount. The interest subsidy depends on the borrower’s annual income. If your income is up to 12 Lakhs, you get a benefit of 4% interest subvention on your Home Loan up to 9 Lakhs. In case your income is above 12 Lakhs and up to 18 Lakhs, the interest subvention is 3% on home loans up to 12 Lakhs.
• Considering an average rate of 8.65% on your Home Loans, the subvention will reduce your effective EMI (Equated Monthly Instalment) by 2,062 and 2,019 respectively.
• This is an upfront subsidy. The amount of subsidy on loans up to 9 Lakhs is 2.35 Lakhs whereas it is 2.30 Lakhs for loans up to 12 Lakhs.
• The advantage of this CLSS (Credit Linked Subsidy Scheme) is that it gives preference to women, especially widows, single working women, and other related categories.
The National Housing Bank has entered into arrangements with commercial banks and other finance companies facilitating the loan process.
Benefits Available to Women Home Loan Borrowers:
Housing Loans for women are getting more attractive. Various Governments over the years have announced benefits in interest rates, stamp duty concessions, and tax benefits to women borrowers.
• The Rate of Interest – The State Bank of India has come up with an attractive Home Loan scheme for women borrowers. Named “SBI Her Ghar Home Loan”, this scheme envisages Home Loans for women at extremely attractive interest rates. They have simplified the eligibility and sanctioning procedure. Now, women can have a hassle-free experience as they can check their eligibility online and apply. Other banks are also following suit with HDFC taking the lead among private financial institutions.
• Stamp Duty Concessions – Many states in India have come forward to help women become home owners. They have relaxed the stamp duty payable on registering property in case the property ownership belongs to a lady (This concession ranges from 1-2% of stamp duty).
• Tax Deductions – Women Home Loan borrowers can avail higher tax deduction of 3.5 Lakhs on their principal and interest repayments. The individual maximum amounts are as follows
a) Repayment of the Principal amount – 1.5 Lakhs
b) Repayment of the Interest portion – 2 Lakhs