Yes. When a business buys an office for its own use, it can usually claim depreciation (10% a year on the written down value for a non-residential building), deduct interest on a business loan taken for the purchase, and, for an office bought under construction from a developer, claim GST input credit if the business is GST-registered. A ready office with a completion certificate carries no GST. The exact benefit depends on how your business is set up, so confirm the numbers with your CA before you sign.
Most business owners ask about price and location first. The tax side comes later, often after the booking. That is a missed chance, because the way you buy an office can change how much tax your business pays for years.
If you are shortlisting commercial projects in Mumbai for your own use, this guide covers the tax benefits worth knowing, in plain language, along with the limits of each one.
1. Can you claim depreciation on an office you own?
Yes. A business that owns and uses an office building can claim depreciation, which is a yearly deduction for the wear and tear of the asset. For a non-residential building such as an office, the rate is 10% on the written down value (WDV).
Here is a simple example. Say the building portion of your office costs ₹1 crore (this is only an illustration):
- Year 1: 10% of ₹1,00,00,000 = ₹10 lakh deduction
- Year 2: 10% of the remaining ₹90 lakh = ₹9 lakh deduction
Two points to remember. First, depreciation applies to the building, not the land, so the land component of the price does not qualify. Second, the Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. The depreciation provisions were carried into the new Act, and the rates stayed the same.
2. Is the interest on your office loan deductible?
If you take a loan to buy an office that your business uses, the interest is generally allowed as a business expense. This is one of the biggest yearly deductions for owners who finance the purchase.
There is one timing detail. If the office is still being built, interest paid before you start using it is usually added to the cost of the asset instead of being deducted in that year. Your CA can tell you how this applies to your loan and your possession date.
3. How does GST work when you buy an office?
GST depends on the stage of the project, and this is where many buyers get surprised.
| Stage of the office | GST on purchase | Input tax credit (ITC) |
|---|---|---|
| Under construction | 12% | Available to an eligible GST-registered business using it for business |
| Ready, with completion certificate | No GST | Not applicable, since no GST is charged |
If you are looking at under-construction offices, the 12% GST is charged on the purchase, but a registered business that qualifies can claim it back as input credit against its own GST liability. If you buy a ready office with a completion certificate, you pay no GST at all.
So the choice is not "which one saves tax". It is "which one fits your timeline and cash flow". An under-construction office may offer easier payment stages, while a ready office lets you move in and start work right away.
4. What about owning versus renting?
Rent is a deductible business expense too, so renting also has a tax advantage. The difference is what you are left with. Rent builds no asset. Ownership gives you depreciation and loan interest deductions, and you also hold a property that may grow in value.
A closer look at buying vs renting an office can help you compare the long-term cost of both routes for your business.
5. Own use versus investment: why the difference matters
Everything above is about an office you buy to run your own business. It is different from commercial property investment, where you buy to earn rent.
If you later rent out part of your space, the income, the tax treatment and the GST on rent can change. Leasing commercial property generally attracts 18% GST. If your plan may shift from own use to commercial real estate investment, speak to your CA before you finalise the purchase.
Quick comparison: the main tax benefits
| Benefit | How it helps | When it applies |
|---|---|---|
| Depreciation | 10% yearly deduction on the building's WDV | Office owned and used for business |
| Loan interest | Reduces taxable business income | Loan taken to buy the office |
| GST input credit | Recovers the 12% GST paid | Under-construction purchase by an eligible registered business |
| No GST on ready office | Lower upfront cost | Completion certificate issued before sale |
Checklist before you buy
- Decide whose name goes on the agreement. The entity that buys (proprietor, partnership, LLP or company) can affect which claims are available.
- Check your GST registration. Input credit is only for eligible registered businesses.
- Confirm the project stage. Ask whether the office is under construction or has a completion certificate.
- Verify the project's RERA registration. Tax benefits mean little if the project papers are weak.
- Keep every invoice and payment record. Your CA will need them for each claim.
- Do not buy only for tax. A tax deduction never replaces good location, access for clients and staff, and a fair price. Long-term commercial property appreciation depends on these basics too.
Where Bhatia Builders fits in
Bhatia Builders has been building in Mumbai since 1987, is ISO 9001:2015 certified and is a CREDAI-MCHI member. Its commercial portfolio includes Esspee Square in Borivali East and Orion Business Park in Borivali West, which is listed as ready to move in.
To see what a ready office looks like in practice, look at Bhatia Builders commercial projects such as Orion Business Park, and compare it with a project that is still being built.
Whichever of the commercial projects in Mumbai you shortlist, ask about the project stage, the paperwork and the payment plan first, then work out the tax effect with your CA.
Frequently Asked Questions
Can a business claim depreciation on an office it buys? Yes. A business that owns an office and uses it for its work can claim depreciation on the building at 10% of the written down value. Land is not depreciated.
Is there GST on a ready commercial office? No. If the completion certificate is issued before the sale, GST does not apply.
Can I claim GST input credit on an under-construction office? Under-construction commercial property attracts 12% GST, and input credit is available to an eligible GST-registered business that uses the office for business. Your CA can confirm whether you qualify.
Is loan interest on an office purchase tax deductible? Generally yes, when the loan is taken to buy an office used in your business. For an under-construction office, interest paid before you start using it is usually added to the asset's cost.
Did the new Income-tax Act, 2025 change depreciation rates? The new Act came into effect from 1 April 2026 and replaced the 1961 Act. The depreciation provisions were carried forward, and the rates remain the same.