Once you've applied for AICTE scholarship the seat you get with the general rank will be withdrawn from you and a new list of ranks is released that contains only those who have applied for the scholarship.

This rank will be based on your MU-OET rank and annual income(I'm not not sure about the former,though).

The seats which have been withdrawn are again filled according to the newly given rank and the availability of the seats.

So if your Annual income is less than 6 lakhs, you can apply it.