Construction Linked Plan (CLP), Subvention Scheme, Flexi Plan, 20:80, 50:50 — every India property payment structure explained in plain language, with a live calculator and the 3 real strategies investors use to turn flexible payment terms into actual profit.
Most Common India Plans
| CLP — most common | Milestone-linked instalments |
| Subvention — low EMI burden | Bank pays, developer covers interest |
| 20:80 — standard ratio | 20% then 80% on possession |
| Flexi Plan | Custom cash-flow based schedule |
| Down Payment Plan | 10–15% extra discount, pay early |
Start Here
If you're new to Indian real estate, start here. If you already know CLP and subvention, skip to the plans below.
When you buy an under-construction property in India, you rarely pay the full price on booking day. Instead, the total price is split into a payment plan — a schedule of payments due at different points, usually tied to either time or construction progress.
India's market uses different terminology from Dubai, but the underlying ratios work the same way. A 20:80 plan here means the same thing: 20% paid during construction, 80% at possession.
💡 The key India-specific terms to know: CLP (Construction Linked Plan), Subvention Scheme, and Flexi Plan. These describe how the instalments are funded and timed — not just the ratio.
Every Structure, Explained
From the standard CLP ratios to subvention and flexi plans — here is every payment plan type used in India's residential market today.
A 3-way agreement between buyer, developer and bank. The buyer pays a small upfront amount (often 10–20%), the bank disburses the rest to the developer in stages, and the developer pays the pre-EMI interest on the buyer's behalf until possession. The buyer's own EMI starts only after possession.
Common structures: 10:80:10, 20:80:0 (developer pays interest on the 80%), 30:40:30.
A hybrid model where the buyer and developer agree on a customised schedule based on the buyer's personal cash flow rather than fixed construction milestones. Useful for self-employed buyers, business owners, or NRIs whose income arrives irregularly (e.g. bonus cycles, project payouts).
Interactive Tool
Enter the property price and pick a plan to see your exact payment breakdown.
All figures in INR (₹). For illustration only — confirm exact schedules with the developer's official payment plan and your bank.
Illustrative only. Actual stamp duty varies by state (3–7%), GST applies only to under-construction (not ready-with-OC) properties, and exact instalment schedules vary by developer. Confirm exact terms in your Agreement to Sell.
Same property price, different plans — see exactly how the cash flow differs.
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How Investors Actually Profit
Payment plans aren't just a convenience — used strategically, they're a tool. Here are the 3 real strategies our investors use.
Buy under-construction on a low-entry CLP or subvention plan (10:90 or 20:80), let the unit's value rise as construction progresses, then assign/resell your booking to another buyer before possession — for more than you've paid in so far. The new buyer takes over the remaining payment obligation to the developer (subject to developer NOC and any applicable transfer charges).
This works because of leverage: you put down only 10–20% of the price, but benefit from price appreciation on the full property value.
Property price: ₹1,50,00,000 on a 20:80 CLP plan. You pay 20% = ₹30,00,000 across booking and construction instalments.
2 years later, the project is nearing completion and similar units in the micro-market have appreciated 18% (common in fast-growing corridors like North Bengaluru or Gurgaon's Dwarka Expressway). The unit's market value is now approximately ₹1,77,00,000.
You assign your booking for ₹1,77,00,000. After developer transfer/NOC charges (typically 1–2% of value) and applicable taxes, your profit is approximately ₹23,00,000 on a ₹30,00,000 investment — roughly 77% return over 2 years.
This is an illustrative scenario only. Actual resale value depends on market conditions, project progress, developer transfer policy and buyer demand at the time — there is no guarantee prices will rise, and they can fall. See the Risks section below.
Instead of reselling, you complete the payment plan through to possession, then rent the unit out. India's rental yields are modest by global standards (2–5% gross, highest in Bengaluru), but combined with strong capital appreciation in growth corridors, holding for the long term remains a core wealth-building strategy — especially in cities with strong end-user demand.
Same ₹1,50,00,000 unit in Bengaluru, on a CLP plan: 40% paid during construction (₹60,00,000), remaining 60% (₹90,00,000) financed via home loan at possession.
At possession, you rent the unit for an estimated ₹5,25,000/year (3.5% gross yield, typical for North Bengaluru). That rental income can offset a meaningful portion of your home loan EMI — and you continue to benefit from capital appreciation on the full ₹1,50,00,000 asset value, not just the equity you've put in.
Because low-entry CLP or subvention plans free up capital that would otherwise be locked into one property, experienced investors use the saved capital as the booking amount on a second (or third) unit — building a multi-property portfolio with the same total starting capital that would normally buy just one property outright.
You have ₹1,00,00,000 available to invest. Buying one property outright at ₹1,00,00,000 gives you exposure to one unit.
Instead, you book a unit priced at ₹1,00,00,000 on a 10:90 subvention plan, paying only ₹10,00,000 upfront — the bank disburses the remaining 90% in stages, and the developer covers pre-EMI interest until possession. This frees up ₹40,00,000 of your original ₹1,00,00,000 to use as the booking amount on a second ₹2,00,00,000 unit on a 20:80 CLP plan (requiring ₹40,00,000 upfront).
Result: with the same ₹1,00,00,000 starting capital, you now have exposure to ₹3,00,00,000 worth of real estate across 2 units instead of ₹1,00,00,000 across one — tripling your market exposure with the same capital, while also tripling your downside exposure and carrying two simultaneous loan/instalment obligations if prices fall or possession is delayed.
This strategy amplifies both gains and losses, and concentrates subvention/loan risk across two projects simultaneously. Only pursue this with a clear repayment plan and contingency buffer. See Risks below.
Quick Guide
A simple starting point — always discuss your specific situation with an advisor and your CA before deciding.
Best for investors planning to resell before possession or stretch a small budget across a higher-value unit, with the bank/developer covering most of the carry cost.
The most widely available and most transparent structure — you can verify exactly what construction stage triggers each payment.
Pay more during construction in smaller tracked instalments so the lump sum (or loan amount) due at possession is smaller.
Developers often reward larger upfront commitment with the steepest discounts — best if you have capital available early and want to avoid a large loan later.
Specifically designed to eliminate the double burden of paying rent on your current home while also servicing a home loan EMI before possession.
Suits self-employed buyers, business owners and NRIs with irregular income cycles who need a payment schedule built around their actual cash flow.
Read Before You Invest
Every strategy above works because of leverage — putting in a small percentage to gain exposure to the full property value. Leverage amplifies gains. It amplifies losses exactly the same way.
📉 Historical precedent: Following the 2008–09 global financial crisis, India's real estate sector experienced a sharp slowdown, with sales volumes and prices stagnating across major cities for an extended period. More specifically relevant to subvention-style payment plans, several large NCR-based developers in the years that followed — including high-profile cases involving Jaypee Infratech and Amrapali Group — defaulted on construction commitments after collecting substantial buyer payments under subvention and CLP schemes, leaving thousands of homebuyers without possession for years and triggering NCLT insolvency proceedings and Supreme Court interventions. RERA (2016) was introduced specifically in response to widespread cases like these, and has materially improved buyer protection — but the underlying lesson remains: payment plans that defer large sums or rely on developer financial health carry genuine risk, not just convenience.
The strategies on this page are presented because they are genuinely how experienced investors use payment plans — not because any outcome is guaranteed. Only commit capital you can afford to have tied up for longer than planned, and only take on instalment or loan obligations you could still meet even if your original plan (reselling, renting, or moving capital) doesn't go as expected. Always verify a developer's RERA registration, delivery track record and financial standing before committing to any payment plan — especially subvention schemes.
This page is provided for general informational and educational purposes only. It does not constitute financial, investment, legal or tax advice, and should not be relied upon as such. All numerical examples on this page — including the calculator, comparison tool, and worked examples under "3 Ways to Make Money" — are illustrative and hypothetical only. They are based on assumptions stated alongside each example and do not reflect any specific property, project, or guaranteed outcome.
Real estate values can rise or fall. Past or hypothetical performance is not indicative of future results. IA Wealth Real Estate LLC does not guarantee any rate of return, rental yield, resale value, loan approval, or investment outcome of any kind, and accepts no liability for investment decisions made based on the content of this page.
Before entering into any payment plan, subvention scheme or property purchase, always review the developer's official Agreement to Sell, verify RERA registration independently, confirm all terms directly with the developer and your bank, and seek independent financial, tax and legal advice appropriate to your personal circumstances.
20 Most Asked Questions
A Construction Linked Plan ties payment instalments to verified construction milestones — for example, 10–15% on booking, then further instalments at foundation, plinth, slab completion, brickwork and finishing stages, typically spread over 3–4 years. RERA requires that disbursements (from your own funds or a bank loan) match actual, verified construction progress, giving CLP buyers transparency and oversight.
A subvention scheme is a three-way agreement between the buyer, developer and bank. The buyer pays a small upfront amount (often 10–20%), the bank disburses the remaining loan to the developer in construction-linked stages, and the developer pays the pre-EMI interest on the buyer's behalf until possession. The buyer's own EMI starts only after taking possession — reducing financial pressure during construction.
It carries more risk than a standard CLP. If construction is significantly delayed, the responsibility for pre-EMI interest can shift back to the buyer, depending on the agreement terms — meaning you could end up paying EMI on an incomplete property. Several major developers have defaulted on subvention commitments during construction delays in the past. RERA has improved accountability, but always verify the developer's delivery track record before opting for subvention.
CLP ties payments to fixed, predetermined construction milestones. A flexi payment plan allows the buyer and developer to customise the schedule based on the buyer's personal cash flow rather than following milestone triggers. Flexi suits self-employed buyers or those with irregular income; CLP offers more transparency tied to visible, verifiable progress.
Yes, this is generally possible, subject to the developer's transfer/assignment policy and any applicable NOC or transfer charges (typically 1–2% of the transaction value). You assign your booking and remaining payment obligation to a new buyer. Any profit is the difference between what you've paid in plus the resale price, minus transfer charges and applicable taxes. Always check the specific transfer clause in your Agreement to Sell.
Missing a CLP instalment typically triggers a grace period and formal notice under RERA-regulated procedures. If the default continues, the developer can cancel the Agreement to Sell. Depending on the construction stage and amount already paid, you may forfeit a portion of your payments — the retained percentage is generally defined in the agreement and subject to RERA-compliant cancellation terms.
Yes. NRIs can use the same CLP, subvention and flexi payment structures available to resident Indian buyers, subject to FEMA rules. Payments must be made through NRE or NRO bank accounts. Some banks offer specific NRI home loan products with adjusted documentation requirements, but the underlying payment plan mechanics work identically.
It depends on the plan. Under a standard CLP funded from your own savings, there is no interest — you simply pay the agreed instalments. If your CLP is funded via a home loan, you pay standard mortgage interest from disbursement. Under a subvention scheme specifically, the developer pays the interest on your behalf during construction — you don't pay interest until possession, when your own EMI begins.
RERA requires that 70% of buyer funds collected for a project be deposited in a separate escrow account, released to the developer only against verified construction progress. This is a significant improvement over the pre-RERA era, but enforcement strength varies by state. Always verify the project's RERA registration number on your state's RERA portal and check for any complaints filed before paying anything.
Most under-construction projects require a minimum booking amount of 10–15% of the property value to reserve a unit. Some promotional or low-entry subvention schemes allow booking with as little as 1% upfront, though these are less common and should be verified carefully for hidden conditions.
Yes. CLP, subvention and flexi plans apply specifically to under-construction property purchased directly from a developer. Ready-to-move properties with an Occupancy Certificate (OC) are typically purchased with full payment or a standard home loan disbursed in one go — milestone-linked instalment structures don't apply once construction is already complete.
Yes, for under-construction property — GST of 5% (1% for affordable housing) applies on the base price and is typically charged proportionally with each instalment as construction progresses. Ready-to-move properties with an Occupancy Certificate are exempt from GST, which is one reason ready properties can sometimes work out cheaper despite a higher base price.
Generally, Down Payment Plans requiring 70–80% upfront come with the steepest developer discounts, since the developer receives capital sooner with less collection risk. If your priority is the lowest possible price and you have capital available early (or via a quick loan), a heavier front-loaded plan typically secures better pricing than a 10:90 or subvention structure.
Generally no — once the Agreement to Sell is signed, the payment plan structure is contractually fixed. Some developers may allow switching in specific circumstances at their discretion (for instance during a sales slowdown), but this is not a buyer right. Choose your plan carefully before signing, ideally with advisory guidance on your cash flow and loan eligibility.
Leverage means controlling an asset worth more than the capital you've actually put in. On a 10:90 or subvention plan, you put in 10% of the property's value but benefit from (or are exposed to) 100% of any price movement on the full value. This is why low-entry plans can produce outsized percentage returns if prices rise — and equally outsized percentage losses if prices fall or possession is delayed.
If you're an NRI reselling/assigning your booking, TDS rules under Section 195 apply to the gain — typically deducted by the buyer at applicable rates (12.5% for long-term, 30% for short-term gains, per current rules) before the balance is paid to you. Resident Indian sellers face lower standard TDS rates. Always consult a CA before reselling to understand your exact TDS and capital gains liability.
There's no single "safest" plan for everyone, but conservative first-time investors often prefer a standard CLP over subvention — CLP ties payments transparently to visible construction progress, giving you natural checkpoints to verify the developer is delivering before paying further instalments. Pairing CLP with an established, RERA-compliant developer with a strong delivery track record further reduces risk.
Yes — this is the standard approach for most buyers. Banks typically disburse a home loan in stages aligned with CLP milestones, with the final disbursement at or near possession. Banks generally require RERA registration verification and approved project status before sanctioning a loan against an under-construction property.
It depends on your goals and risk tolerance. Reselling before possession suits investors comfortable with market timing risk who want a faster exit and don't need a completed asset. Renting suits investors who want a long-term income and appreciation asset and are comfortable holding through full market cycles. Leverage stacking suits experienced investors who can comfortably manage multiple simultaneous loan/instalment obligations and want maximum market exposure — but it carries the highest combined risk if the market turns or a project is delayed. Discuss your specific cash flow and risk appetite with an advisor and your CA before committing to a strategy.
Yes. Beyond the instalments themselves, budget for stamp duty (3–7% depending on state), registration charges (0.5–1%), GST on under-construction property (5% on base price), and developer infrastructure/maintenance deposits (often Rs 2–8 lakh). Total additional cost typically adds 10–14% above the base price — plan your total cash requirement accordingly, not just the instalment percentages.