What a CLP is, how it compares with other plans, how to raise a demand that holds up, and the RERA, GST and TDS rules your accounts team has to get right.
01At a glance
A construction-linked payment plan (CLP) is a way of paying for an under-construction home in which the buyer pays the price in instalments, each one falling due only when the building reaches a defined stage — foundation, each slab, brickwork, plastering, flooring and possession. In India it is one of the most common plans for new residential projects because it ties the buyer’s money to visible progress and the builder’s cash flow to the pace of construction. A CLP works only if every demand is backed by evidence that the stage was actually reached, is dated from that evidence, and is receipted with the correct GST and TDS. Under the RERA Act, no more than 10% of the cost can be taken before a registered agreement for sale.
Updated . Rules as of October 2026 — check your state RERA rules and your CA.
02Plan types
A construction-linked plan is one of four plan types an Indian builder will usually offer. They differ in when the money moves, and so in who carries the risk of a delay.
| Plan | When the buyer pays | Who carries delay risk | Typical fit |
|---|---|---|---|
| Construction-linked (CLP) | In instalments, each due when a construction stage is reached | Shared: if the site stops, demands stop | Most under-construction residential projects |
| Down-payment | Most of the price up front, the balance at possession; often with a discount | Mostly the buyer, who has paid before the building exists | Buyers with cash who want the lowest price |
| Time-linked | In instalments on fixed calendar dates, whatever the site has reached | Mostly the buyer: dates arrive even if work slips | Fast-moving projects with a reliable construction schedule |
| Subvention / flexi | A small share now; a lender or the builder covers interest or defers the rest until possession | Mostly the buyer: the loan is in the buyer’s name, so if the builder stops paying the interest, the lender recovers from the buyer | Slow markets, launches that need early bookings |
Names vary from builder to builder, and many plans are hybrids — for example, a time-linked booking stage followed by construction-linked instalments. What matters is what the agreement for sale says: under the RERA Act it must state the dates and manner of payment.
03Schedule
The table below is an example, not a rule. Every project sets its own stages and percentages in the agreement for sale; a high-rise will have more slab stages than a ground-plus-two villa project, and some builders split possession into “on completion” and “on handover”.
| Stage | Due on | Example share | Cumulative |
|---|---|---|---|
| Booking | Application / allotment | 10% | 10% |
| Agreement | Registration of the agreement for sale | 10% | 20% |
| Foundation | Foundation complete, certified | 10% | 30% |
| Slabs | Each floor slab cast (e.g. five slabs at 6% each) | 30% | 60% |
| Brickwork | Brickwork of the unit complete | 10% | 70% |
| Plastering | Internal and external plastering complete | 10% | 80% |
| Flooring and fittings | Flooring, doors, windows and fittings complete | 10% | 90% |
| Possession | Occupancy certificate received, unit handed over | 10% | 100% |
The booking row is capped by law: a promoter cannot accept more than 10% of the cost as an advance or application fee before entering into a written agreement for sale and registering it.
04Raising a demand
A construction-linked demand is a request for the instalment tied to one stage. It should follow the same six steps every time, so that each demand can be defended if a buyer or a RERA authority asks why it was raised.
The site engineer reports the stage complete — the slab is cast, the brickwork is done. Nothing goes to the buyer yet.
Good practice is for the architect or engineer to certify completion, and for the site team to take dated photographs. The certificate and photographs are filed against the stage, with the date it was actually reached.
The demand names the stage, the amount and its share of the agreement value, the GST on it, the TDS the buyer must deduct if it applies, and the bank and UPI details. Attaching the evidence answers the buyer’s first question before it is asked.
The due date is the date the stage was reached plus the grace days in the agreement — say, reached on 14 September with 7 days’ grace gives 21 September.
A reminder a few days before the due date and another a day before catches most delays. After the due date, interest for delay applies at the rate in the agreement and your state’s RERA rules.
Each payment gets a numbered receipt that records the amount, the GST and any TDS the buyer deducted, and the statement of account is updated with paid, due and balance.
Most builders keep a planned construction schedule in a spreadsheet, and it is tempting to raise demands on the planned dates. Do not. A CLP promises the buyer that money falls due when the stage is reached; a demand dated from a plan that the site has not met is, in substance, a time-linked demand the buyer never agreed to. It also breaks the link between collections and progress that RERA relies on: 70% of the money realised from buyers must sit in a separate project account, and withdrawals from it must be in proportion to the percentage of completion, certified by an engineer, an architect and a chartered accountant.
Stages slip and plans get revised, and the schedule will need to move. Move only the instalments that are still unpaid. A milestone that has been paid, or part-paid, keeps the due date the buyer was given. Re-dating it rewrites history: the buyer’s receipts, the TDS they deposited and any delay interest were all calculated against the original date, and a statement of account that no longer matches them is the start of a dispute.
05The rules
These are the central rules that touch a construction-linked plan. States add their own RERA rules on top — interest rates and the agreement format in particular — so treat this as a checklist for your CA and legal team, not as advice.
Rules as of October 2026 — check your state RERA rules and your CA.
[01] Rule
[02] Rule
[03] Rule
[04] Rule
[05] Rule
06Mistakes
A demand that goes out on the site engineer’s word, before the certificate and photographs exist, is the easiest one for a buyer to refuse — and the hardest to defend at RERA.
Charging 5% on an apartment that qualifies as affordable, forgetting that the buyer deducted 1% TDS, or receipting the gross amount as if no TDS was deducted all leave the statement of account out of step with the buyer’s own records and tax filings.
When the schedule is revised, the whole plan gets shifted — including instalments the buyer has already paid. Their receipts, TDS and any interest no longer match the new dates.
Certificates in one inbox, photographs on a site engineer’s phone and demand letters in a shared drive cannot be put together quickly when a buyer files a complaint. File the evidence against the stage and the demand when it is created.
A CLP asks the buyer to trust that each stage is real. If the first they hear of a stage is a demand letter, the next call is to ask whether it is true. Showing progress as it happens turns demands into confirmations.
07In ZevroCRM
08Construction-linked plans
Short answers. Check the specifics against your agreement, your state RERA rules and your CA.
A construction-linked payment plan (CLP) is a plan for buying an under-construction home in which each instalment falls due when the building reaches a defined stage, such as the foundation, each slab, brickwork, plastering, flooring and possession. The stages and percentages are set out in the agreement for sale.
A builder can collect no more than 10% of the cost of the apartment, plot or building as an advance or application fee before entering into a written agreement for sale and registering it, under section 13(1) of the Real Estate (Regulation and Development) Act, 2016.
A construction-linked plan is usually safer for the buyer than a time-linked plan, because a CLP instalment falls due only when the site reaches a stage, while a time-linked instalment falls due on a calendar date even if construction has slipped. A time-linked plan gives the builder more predictable cash flow.
GST on a construction-linked instalment for an under-construction residential apartment is an effective 1% for an affordable apartment and 5% for other apartments, without input tax credit, under the rates in force since 1 April 2019 (some projects already under way then opted to keep the older rates with credit). No GST applies where the entire price is paid after the completion certificate or first occupation. An affordable apartment has a carpet area of up to 60 sq m in the six metro cities or 90 sq m elsewhere, and a gross amount of no more than ₹45 lakh.
Yes — when the consideration or the stamp duty value is ₹50 lakh or more, the buyer deducts 1% TDS from each instalment as it is paid, on the consideration or the stamp duty value, whichever is higher. It was section 194-IA with Form 26QB; from 1 April 2026 it is section 393(1) of the Income-tax Act, 2025, with Form 141.
Under the RERA Act, a buyer who pays a construction-linked instalment late pays interest for the delay, and a builder who delays possession pays the buyer interest for every month of delay if the buyer stays in the project (or refunds with interest if the buyer withdraws) — at the same rate both ways. The rate is prescribed by each state’s RERA rules.
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