What Is a Construction Linked Plan (CLP)?
A construction linked plan is the most common payment structure for under-construction property in India. Instead of paying the full price at booking or within a fixed 60-day window, you pay in instalments that are released only when the builder finishes a defined construction stage - foundation, plinth, slab, brickwork, finishing, and finally possession. The builder cannot demand the next instalment until the previous milestone is actually complete.
This matters because it links your payment risk directly to construction progress. If the builder stalls after the plinth stage, your exposure is limited to whatever you've paid up to the plinth instalment, not the full property value. That's why RERA-registered projects are required to disclose their CLP schedule as part of the agreement for sale, so buyers know exactly what triggers each demand.
Standard Construction Linked Plan Schedule (Stage-Wise)
The most widely used CLP structure in India splits the price across ten stages:
| Construction Stage | % of Price |
|---|---|
| Booking amount | 10% |
| On allotment / agreement to sell | 10% |
| On completion of foundation | 10% |
| On completion of plinth | 10% |
| On completion of 1st slab | 10% |
| On completion of superstructure | 15% |
| On completion of brickwork | 10% |
| On internal plaster & flooring | 10% |
| On external finishing & fittings | 10% |
| On possession / registration | 5% |
* Exact percentages and stage names vary by builder and project. Always match the schedule against your agreement for sale, not a generic table.
How Home Loan Disbursement Works Under a CLP
When a CLP purchase is loan-funded, the bank does not hand over the full sanctioned amount on day one. It disburses the loan in parts, matching your builder's construction stages, after your own contribution (down payment / margin money) is used up first. This is standard practice across SBI, HDFC, ICICI, and every major lender for under-construction property.
During this period, you pay pre-EMI: interest only, calculated on whatever portion of the loan has actually been disbursed so far, not the full sanctioned amount. Pre-EMI does not reduce your principal - it's purely interest, so the loan tenure doesn't start counting down yet. Once the builder hands over possession and the bank disburses the remaining loan, pre-EMI converts to a full EMI (principal plus interest) for the rest of your chosen tenure. Use the loan toggle in the calculator above to see both numbers for your property.
GST and RERA Rules on Construction Linked Plan Payments
- GST: Every CLP instalment paid before the project receives its completion certificate attracts GST - 5% for standard residential units, 1% for affordable housing (units up to ₹45 lakh meeting the carpet area criteria), both without input tax credit. No GST applies once you buy after the completion certificate is issued.
- RERA disclosure: RERA-registered projects must publish the CLP schedule in the agreement for sale (typically as Annexure A or B), and the builder can only raise a demand once that specific milestone is verifiably complete.
- 10% advance cap: Under Section 13 of RERA, a builder cannot collect more than 10% of the property cost as an advance or application fee before a registered agreement for sale is signed.
- Refund on delay: If the builder fails to deliver on the disclosed timeline, RERA entitles you to a refund of the amount paid, with interest, or compensation for the delay - if you choose not to continue with the project.
Construction Linked Plan vs Down Payment Plan
The two most common alternatives to CLP are a down payment plan (10-15% at booking, balance within 30-60 days, before most construction happens) and a possession-linked plan (a small amount at booking, the bulk only at possession). CLP sits in between: it spreads your payment risk across the construction timeline instead of front-loading or back-loading it.
A down payment plan typically earns a 5-8% price discount from the builder because it improves their cash flow immediately. A CLP gives up that discount in exchange for paying only as the building actually gets built - which matters more with a newer developer or a project without a strong delivery track record. See our full comparison of CLP, down payment, flexi, and possession-linked plans for a stage-by-stage breakdown.