East Bengaluru buyer answers

Construction-linked vs time-linked payment plan: which is safer?

By Gaurav Mongia, acre&key · Published 16 Oct 2026 · Updated 16 Oct 2026

Direct answer: For most buyers, a construction-linked plan is safer, because you pay as the building actually goes up, so your money tracks real progress. A time-linked plan asks you to pay on fixed dates, whether or not construction has kept pace, which can leave you having paid a lot for a building that's behind.

Disclosure: acre&key’s advice is free to buyers; we are an authorised sales partner for some projects and may be paid by the developer.

Verify with your lawyer and CA: This page is general guidance on flat payment plans under the RERA Act, not legal or tax advice. Before you sign, have your own property lawyer check the payment schedule and stage definitions in the agreement for sale, and ask your CA how the plan affects GST on your payments and the interest on your home loan.

How each plan works

Construction-linked (CLP). Payments fall due at stages: booking, agreement, foundation, each slab, brickwork, finishing, possession. If construction slows, your payments slow too.

Time-linked (TLP). Payments fall due on set dates, every few months for example, regardless of progress.

Down payment or upfront plans. A large share paid early, often for a discount. Highest risk on an under-construction project.

Flexi or hybrid. A mix. Read exactly what triggers each payment.

Side by side

Why real estate consultancy services usually prefer construction-linked

If the project runs late, a CLP limits how much of your money is tied up in an unfinished building. Your rights under section 18 of the RERA Act on delay still apply either way, but they're easier to live with when you haven't paid most of the price.

Section 4(2)(l)(D) of the Act also requires the promoter to deposit 70% of the amounts collected from buyers into a separate account for that project's construction and land cost. That helps, but it isn't a substitute for paying in step with progress.

When a time-linked plan might make sense?

• The project is well advanced and close to completion.
• The builder has a strong record of on-time delivery.
• The discount is meaningful and you can afford the risk.
• Your loan sanction can match the dates.

Payment plans and your loan

Banks disburse under-construction loans in stages and usually want proof of progress. On a TLP, check the bank will release money on the builder's dates, or you'll need to fill the gap yourself. Ask about pre-EMI interest too.

What to check in any plan

1. What triggers each payment: a stage, a date, or both?
2. How will you know a stage has been reached? An architect's certificate, photos, a site visit?
3. Does the plan in the agreement match what you were told?
4. What's the interest rate if you pay late, and is it the same rate the promoter pays you on delay? (Section 2(za) says it should be.)
5. How much is due at possession, and does that fall after the completion certificate? That can affect GST.

What does the law cap before the agreement is signed?

Whatever plan you pick, section 13(1) limits what the promoter can take up front. They can't accept more than 10% of the cost of the apartment as an advance or application fee without first signing a written agreement for sale with you and registering it. If a time-linked plan asks for 20% or 30% "on booking" before any agreement exists, that schedule is already in conflict with the Act. Ask for the agreement first.

Where does your money go once it's paid?

This is the strongest argument for paying against progress. For a registered project, the promoter's declaration under section 4(2)(l)(D) commits 70% of what allottees pay to a separate account in a scheduled bank, to be used only for construction and land costs. Withdrawals from that account have to be in proportion to the percentage of completion, and an engineer, an architect and a chartered accountant in practice must certify that.

A construction-linked plan lines your payments up with the same logic: money goes in as the building goes up. A time-linked plan can have you paying well ahead of progress, so more of your money depends on the developer's overall finances rather than on your tower's stage.

How do you check the stage before paying a demand?

Don't pay a construction-linked demand on the letter alone. Three checks take minutes:

1. Look at the portal. Section 11(1) requires quarterly updates of project status and approvals on the project's page at rera.karnataka.gov.in. Compare the stage claimed in the demand with the latest update.
2. Ask for the architect's certificate for that slab or stage. Developers usually issue one with stage demands; if they won't share it, ask why.
3. Visit, or have someone visit. Photos from the sales team are not the same as standing on the floor that's supposedly complete.

If the demand runs ahead of what you can verify, write to the promoter before paying. Under sections 19(6) and 19(7) you owe interest for paying late against the schedule in your agreement, so how the agreement defines each stage matters. Read it before you sign.

Before you choose a plan

• Ask the builder for both CLP and TLP prices in writing.
• Work out how much you'd have paid at each point if construction ran a year late.
• Check the builder's delivery record. See builder track record.
• Ask your bank how it will disburse on each plan.
• Have your lawyer check the plan as written in the agreement. See checking the sale agreement.

Frequently asked questions

Is a construction-linked plan always better?

Usually safer. Not always cheaper. Weigh the price difference against the risk.

Can I switch plans after booking?

Rarely, and only if the builder agrees. Decide before you sign.

What is a subvention scheme?

The builder pays your loan interest for a period, often until possession. Read the terms carefully; if the builder stops paying, the bank may still look to you.

How do I verify construction progress?

Visit the site, check the RERA quarterly updates, and ask for the architect's certificate for each stage.

Does the payment plan affect GST?

GST depends on whether the price is paid before or after the completion certificate or first occupation. More in under-construction vs ready-to-move flats.

How much can a builder take before the agreement for sale?

No more than 10% of the cost as an advance or application fee, under section 13(1). Anything beyond that needs a registered agreement for sale first.

References

1. Real Estate (Regulation and Development) Act, 2016, official text hosted by Karnataka RERA (sections 4, 11, 13 and 19). https://rera.karnataka.gov.in/resources/staticpage/Real_Estate_Act.pdf, accessed 15 Oct 2026.
2. Real Estate (Regulation and Development) Act, 2016, full text PDF (PRS Legislative Research). https://prsindia.org/files/bills_acts/acts_parliament/2016/the-real-estate-%28regulation-and-development%29-act,-2016.pdf, accessed 15 Oct 2026.
3. Karnataka Real Estate Regulatory Authority, official portal (project status, agent status, complaints). https://rera.karnataka.gov.in, accessed 14 Oct 2026.
4. CGST Act, 2017, Schedule II para 5(b), CBIC tax information portal. https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/acts/2017_CGST_act/active/chapter21/scheduleii_v1.00.html, accessed 15 Oct 2026.