The limit of subsidy for an individual borrower would be Rs14,912 for a loan of Rs15 lakh, and Rs9,925 for a loan of Rs10 lakh and the extended scheme will benefit all housing loans availed in the current financial year
New Delhi: The government on Wednesday extended the 1% interest subsidy scheme for one more year on housing loans of up to Rs15 lakh, where the cost of the house does not exceed Rs25 lakh, reports PTI.
"When interest rates have risen, even 1% relief is a relief for the middle class and lower middle class," Home Minister P Chidambaram told reporters while briefing about last evening's Cabinet meeting.
The limit of subsidy for an individual borrower would be Rs14,912 for a loan of Rs15 lakh, and Rs9,925 for a loan of Rs10 lakh. The extended scheme will benefit all housing loans availed in the current financial year.
The Cabinet, chaired by Prime Minister Manmohan Singh, had yesterday approved extension of the scheme of the interest subvention of one per cent on housing loans up to Rs15 lakh for the financial year 2012-13.
Chidambaram said a large number of people have benefited from the 1% interest subvention and "whoever borrows now will get the benefit of 1%".
A budgetary provision of Rs400 crore has been made for the financial year 2012-13 for implementing the scheme. The National Housing Bank (NHB) is the nodal agency for implementing the scheme both for banks and housing finance companies.
In his Budget, the then Finance Minister Pranab Mukherjee had proposed to extend the scheme, announced in 2011-12, by one year in view of the shortage of housing for low income groups in major cities and towns.
Earlier, the interest benefit was given on loans of up to Rs10 lakh provided the cost of house did not exceed Rs20 lakh. In 2011-12, the government liberalised the scheme and increased the loan limit to Rs15 lakh and the cost of house to Rs25 lakh.
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