Commercial real estate is among the fastest-growing markets in India. Offices, retail stores, institutions, and industrial developments primarily fall under this umbrella. Commercial property is a property owned to generate income through business activities. 

While many prefer developed structures, commercial plots have also been at the center stage due to higher appreciation and relatively lower investment costs than other asset types in commercial real estate.

However, being abreast of the nuances of buying commercial land is crucial to avoid administrative and legal hassles. From paperwork to zoning laws, there are various factors to look into. Let’s look at essential tips for buying commercial land in India.

Types of commercial property 

Retail - Retail Shops, Stores, Malls

Industrial- Warehouse, Manufacturing Plants , Factories

Hospitality-Tourism Agencies, Motels, Hotels

Institutional- Schools  and Colleges 

Office Spaces- Corporate Offices 

What’s to check before buying a commercial plot in India? 

Review the Location 

1. Location Matters: The most critical factor in buying commercial land is its location. It should be easily accessible with good infrastructure. A prime location ensures higher demand and, in turn, leads to higher profits. 
2. Zoning System: Indian civic authorities use a zoning system based on Euclidean geometry to classify land for commercial purposes. They divide towns into districts with specific zones for different land uses, either permitted or prohibited. 
3. Integrated Zoning: As available land decreases, zoning becomes more integrated. This means that the planning of various zones becomes more coordinated to optimize land usage efficiently. 
4. Clearly Demarcated Commercial Zone: When buying commercial land, ensure it falls within a clearly marked commercial zone. This guarantees that the area is suitable for commercial activities and compliant with local regulations. 
5. Avoid Uncontrolled Development: Avoid land with uncontrolled development like unauthorized boundaries, fences, or incompatible structures within the permitted area. These issues may lead to legal and operational challenges later on. 
6. Types of Commercial Activities: Commercial land can be used for various purposes, including warehouses, offices, restaurants, shops, and industries. The proximity of one commercial zone to another depends on the type of activity and vehicular traffic. 

Taxes and Returns 

1. Taxation of Rental Income: Rent received from any property, including commercial property, is taxed under the head 'income from house property' in India. 
2. Actual Rent or Reasonable Rent: The taxation is based on either the actual rent received from the property or the rent that can reasonably be expected from it, whichever is higher. 
3. Standard Deduction: A standard deduction of 30 percent is allowed on the rent received. This means you can deduct 30 percent of the rental income as an expense before calculating the taxable income. 
4. Deductions for Building Repairs and Renovations: You can claim deductions on the amount invested in building repairs and renovations for the commercial property. 
5. Interest on Loan: Under Section 24 of the Income Tax Act, you can claim the interest paid on the loan taken for the commercial property as a deduction. This includes processing fees and prepayment charges paid to the financial institution.
6. Availability of Standard Deduction: The standard deduction of 30 percent is available even if the actual expenses on the property are higher or lower than that percentage. It simplifies the deduction process. 

Check Documents 

1. Ownership Details: Review the property's registration papers to ascertain the number of owners. Knowing the ownership structure is essential to ensure a smooth and legitimate transaction.
2. Seller's Right to Sell: Verify if the seller has the legal right to trade the commercial property. Confirm that they have the authority to sell the asset and that there are no disputes or legal issues surrounding the ownership. 
3. Existing Loans or Pledges: Check for existing loans or pledges against the land parcel. Knowing if the property has been used as collateral for any debts or financial commitments is crucial. 
4. Clearance of Outstanding Dues: If the land has been mortgaged in the past, ensure there are no outstanding dues related to the mortgage. The seller should clear any pending payments before the deal is finalized. 
5. Title Search: Conduct a thorough title search to verify the property's history and ensure no legal encumbrances, liens, or claims could affect your ownership rights. 
6. Encumbrance Certificate: Obtain an encumbrance certificate from the registrar's office to verify if there are any legal claims or liabilities on the property. 
7. Approved Land Usage: Ensure the land is categorized as a commercial plot in the official records and falls within the designated commercial zone. 
8. Pending Litigations: Check for any ongoing legal disputes or litigations related to the property. Purchasing a plot involved in legal battles can lead to future complications. 
9. Land Boundary and Area: Verify that the boundaries and area mentioned in the registry papers match the actual physical boundaries of the land. 
10. Property Tax Records: Review the property tax records to ensure the seller has paid the appropriate taxes for the commercial plot.

In the last few years, the air quality in cities like Pimpri Chinchwad, Pune, and Mumbai has continued to deteriorate gradually. It is no longer a surprise when the AQI figures go beyond 150, 200, and even 300. This means that the air we inhale daily is becoming increasingly hazardous, particularly for children, the elderly, and people with underlying health conditions. It is no longer a regular occurrence; it is now normal. As the environment deteriorates, so does the level of stress and discomfort.

​People living in urban areas are beginning to ponder how much longer they will have to live within this environment. The traffic congestion, dust particles, sounds of horns and machinery, and the ever-present pressure to move and compete create an environment that is already hard to live with. Even the air that is breathed inside is no longer guaranteed to be safe.

Alongside this change in awareness, there has been an apparent change in what people perceive regarding homes and investments. Increasingly, individuals and families believe that having a retreat from the city environment is no longer a luxury but a necessity. This has triggered a steep demand for plots and second homes in environments that are cleaner and greener. Natural surroundings comprising trees, a cool breeze, and expansive space are becoming the paramount choice for a weekend home, a retirement, or a long-term investment solution.

Investing in land away from the polluted city means an individual gains peace of mind. An apartment, unlike land, lacks flexibility, privacy, appreciation, and a healthier environment. Land becomes a retreat where one can unwind, take a break, or even decide to live there eventually.

​With the increase in levels of pollution in the state of Maharashtra, buyers are seriously contemplating the future. When you purchase a plot of land in a region with plenty of nature around, you get pure air, reduced noise, and a healthy rate of living. With an increase in pollution and a higher increase in the number of people in cities over the coming years, a plot of land in a natural region will be even more valuable.

What is RERA?

RERA stands for Real Estate Regulatory Authority, which has been brought under the Real Estate (Regulation and Development) Act, 2016, in order to bring transparency, accountability, and safety to the real estate sector in India. Every state has its own RERA authority, for instance, MahaRERA in Maharashtra.

RERA applies to:

• Residential & commercial projects
• Land development layouts

How RERA Protects Land & Plot Buyers

1. Ensures Only Legal, Approved Projects Are Sold

All projects have to be registered with RERA before developers can sell any land or plots.

This makes sure that:

• The land title is checked
• The layout plan is approved.
• Permissions are checked

2. Mandatory Disclosure of Project Details

RERA compels the developer to disclose :

• Details of land ownership
• Layout and plot sizes
• Approvals & Sanctions
• Development Timeline
• Amenities promised
• No hidden information or false promises.
• Restrict Misleading Advertisements

A builder cannot advertise or sell plots or unapproved schemes unless the project is registered at RERA and has a valid RERA number.\

3. Prevention of Money Misuse

Developers must maintain 70% of buyers' money in a separate bank account for:

Land development and infrastructure

They are prohibited from making transfers to other projects.

Protection: It keeps projects from being delayed or abandoned.

Severe Penalties on Developers for delays in development, illegally changed outlays or failure to deliver what was promised.

RERA can fine it, freeze accounts, or cancel the project registration.

4. Grievance Redressal Made Easy

Buyers can submit grievances directly to RERA online for delays , fraud, non-delivery or wrong information.

RERA resolves cases faster compared to civil courts.

Protection: Consumers receive fast, inexpensive justice.

5. Open Sales Arrangements

RERA mandates a standard sale agreement, preventing developers from including unfair clauses.

6. Assurance of Timely Delivery

If the developer delays work beyond the committed timeline, the buyers are entitled to compensation.

Interest Refund in case of exit (if they wish to)

Safety: The buyer's investment remains secure.

Land is one of the few assets that appreciates consistently when supported by the right set of external factors. Its value seems static but through time, it gets shaped by infrastructure, location, policy changes, and socio-economic demand. Here are the seven major factors that influence long-term appreciation.

1. Location & Connectivity

The most important factor influencing land value is still location. Plots near developing cities, planned highways, transportation hubs, or industrial corridors appreciate considerably more quickly.  Increased demand and consequently higher prices are the results of improved connectivity, such as new expressways, metro links, widened roads, or airport improvements.

Improved logistics, shorter travel times, and increased residential and commercial interest are all benefits of improved access.  This frequently results in a discernible rise in real estate prices even before infrastructure projects are finished. 

2. Infrastructure & Basic Utilities

Availability of water supply, electricity, road access, drainage, and telecom connectivity adds immediate usability and desirability to land. Even raw plots with easy access to utilities enjoy a higher valuation.

The areas in which local authorities invest, such as streetlights, sewage systems, waste management, or road widening, become naturally more attractive for both developers and end-users. Infrastructure development often initiates multi-year appreciation cycles in surrounding land.

3. Zoning Ordinance & Land-Use Approval

Government zoning policies directly impact the value of land. Land zoned residential, commercial, or industrial sells at a higher price than strictly agricultural areas because of the higher development potential.

Prices for land that can be lawfully rezoned or converted—for instance, from agricultural to residential or commercial—usually rise quickly.  In a similar vein, clear title deeds, uncontested ownership, and the absence of litigation boost marketability and buyer confidence, which drives up prices. 

4. Supply-Demand Disequilibrium

Land is intrinsically scarce. As populations grow, cities expand, and industries migrate to newer areas, the demand for usable land goes up, but its supply remains fixed.

High-growth areas, especially tier-I and tier-II cities, tend to enjoy sustained demand from both buyers and developers. When demand surpasses supply, appreciation becomes inevitable. This holds true to a large extent in suburban corridors where urban sprawl transforms the countryside into residential and commercial hotspots.

5. Future Development Potential

Land appreciation is highly dependent upon the expectations of future development. Announcements related to:

• new highways
• metro or rail corridors
• industrial parks
• IT hubs
• logistics zones
• residential townships

…tend to drive early investor interest and cause value increases even before construction starts.

Speculation is seldom all wrong-it simply mirrors genuine future potential. As a rule, the investors who identify early signs of urban growth usually benefit the most.

6. Natural Features & Environmental Conditions

Topography, soil quality, access to water, and lack of environmental hazards are highly influential in determining value, particularly for agricultural, resort, or residential land.

The lands that have beautiful scenery, a body of water around it, or even slight slopes command better prices. In contrast, land requiring heavy levelling, environmental clearance, or flood mitigation appreciates more slowly because of the high cost of development involved.

7. Social Amenities & Neighbourhood Growth

Land demand is boosted by the presence of schools, hospitals, markets, shopping centres, parks, and public services in the area. When an area becomes socially well-developed, it attracts families, businesses, and builders, thereby establishing a long-term upward trend of land price improvements.

Even agricultural land near expanding residential belts can appreciate dramatically once neighbouring regions begin to urbanise.

Conclusion 

Accessibility, infrastructure, legal clarity, development potential, environmental quality, and social growth all contribute to an increase in land value.  Even though land is a reliable long-term investment, investors can find plots with the highest potential for appreciation by understanding these seven factors.  Land can provide substantial returns for decades if strategic research and due diligence are done. 

1. Ownership & Title Documents

Mother Deed Check and Original Title Deed

Verify the full ownership chain (at least 30 years, if feasible).

Verify that all documents have the same names, survey numbers, and plot details.

Check to see if he has the complete legal authority to sell the property. 

2. Encumbrance Check

Get an Encumbrance Certificate (EC for at least 30 years.

There are no mortgages, liens, loans, court orders, or attachments

Verify with the records of the SRO

3. Property Tax & Bills

Property tax receipts are updated.

Request the last 3–5 years' tax payment history

Check for pending dues: electricity, water, society charges, maintenance

4. Verification of Land & Plot

Verify land classification: non-agricultural, NA-residential, NA-commercial, etc.

Check government records for restricted / acquisition zones

Verify property is not under forest land, ceiling land, grazing land, or CRZ restrictions

Check F-Line 7/12 Extract, Property Card, Mutation Entries

5. Legal Clearances

Confirm Approvals from Town Planning Department

Ensure that the approved plan/development permission is current

6. Verification of Seller's Identity

Verify the seller's PAN, Aadhaar, passport, and address proof

If co-owned, check consent from all co-owners

If a Power of Attorney is used, ensure:

• It is registered
• Seller is alive
• POA is specific to the property and valid

7. Verification against Government Records

Property matches records in the local revenue office

Verify mutation entries for accuracy, and update them

Confirm the property is not marked as disputed / government-owned / encroached

8. RERA Check (If Applicable)

Check the project and builder on the RERA website

Check:

• Approvals
• Project status
• Complaints
• Background history of litigation

9. Affidavit of Title

Obtain a legally notarised Affidavit of Title from seller

10. Physical Verification

Examine property lines with a certified surveyor

Verify that the fencing corresponds to the survey numbers.

Consult your neighbours for firsthand confirmation.

Check for disputed pathways or encroachments. 

11. Lawyer Review 

All documents to be verified by a property lawyer

Get a written Title Search Report 

Certificate of Legal Clearance Final Step: Safe Payment 

Make payments only through bank transfer 

Never pay without an Agreement to Sell 

Register the property immediately after payment

What does the term Vahivat mean?

Vahivat (or Vahiwat) means possession, use, or management of land. It refers to someone who controls and uses a piece of land, even if they are not the legal owner.

How is Vahivat different from ownership?

Vahivat    Ownership

Actual use/possession, Legal title in records

May manage or cultivate land. Has full legal rights to transfer, sell, or mortgage

Not always permanent or official. Officially recognised and documented

A person can have vahivat of land without being its registered owner.

Who is a Vahivatdar?

A vahivatdar is the person who physically controls the land, manages, or cultivates it

• May collect profits/produce
• May lease or administer the property

They are users or managers of the land, not necessarily owners.

Is Vahivat recorded in government documents?

Yes.In cases where ownership is unclear or disputed, revenue officials sometimes record the possessor’s name under:

• “Jungle Vahivat” – for forest or uncultivated land
• “Vahivatdar” column – for land under someone’s management or possession

This acknowledges de facto (actual) possession, even if ownership is not settled.

Does Vahivat give legal ownership rights?

No, vahivat alone does not give ownership.

However, long-term, continuous possession may be used in court for claims like adverse possession.

Can Vahivat affect land disputes?

Yes. Vahivat becomes important in cases related to:

• boundary disputes
• Inheritance of land in possession
• long-standing agricultural use
• claims on unused or government land
• establishing common public access routes

Courts often examine who had actual possession for how long.

What is a “Vahivat Road”?

A vahivat road is a path or road used by people for many years—

even if it passes through private land.

Long-term public use can make it recognised as a public right-of-way.

Can a Vahivatdar sell the land?

Generally, no, unless they also have legal ownership.

A Vahivatdar may:

• ✔ use the land
• ✔ manage it
• ✔ lease it (in some cases)

But cannot legally sell, mortgage, or transfer without proper title.

Why does Vahivat still matter today?

It matters for:

• Old revenue records
• rural land usage patterns
• boundary clarification
• disputes over long-term possession
• determining public access routes
• historical occupancy rights

Many villages still use the terms in everyday land-related discussions.

Why are Vahivat maps becoming an issue?

Because authorities are modernising land records.

Old vahivat-based maps often lack legal clarity.

This is why departments (like in Pune district) are cancelling old vahivat surveys and demanding proper re-measurement.