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.

1. What is Khudkasht?

The word Khudkasht comes from old land-revenue systems in India.

It means land that is personally cultivated by the owner.

Cultivation can be done by:

• the owner himself,
• the owner’s family members,
• or hired labour working under the owner’s supervision.

It also includes land earlier recorded as Sir, Havala, Niji-jot, etc., in old settlement records.

2. Legal Meaning of Khudkasht

Indian tenancy and land revenue laws clearly define what counts as “personal cultivation.”

Even if owners like widows, minors, or disabled persons cannot personally supervise cultivation, the land can still legally be considered Khudkasht.

Courts have explained that Khudkasht land must be under direct control and use of the landowner, not tenants.

3. Key Features of Khudkasht Land

• Land is directly cultivated by the landowner, not rented out.
• Land is recorded in revenue records specifically as Khudkasht.
• Rights are connected to personal use, not to tenancy.
• Transfer of Khudkasht land can have restrictions, depending on state laws.
• These rights can be passed on to legal heirs.

4. Why Khudkasht Matters in Real Estate

A. Ownership Rights

Khudkasht holders have strong rights because they cultivate the land themselves.

These rights often continue even after changes in land laws.

B. Transfer Restrictions

Khudkasht land usually cannot be sold or transferred freely like normal freehold land.

Some transfers may require government permission or may not be allowed at all.

C. Effect on Land Value

Because of limited transfer rights, Khudkasht land often has lower market value compared to freehold land.

D. Loan & Finance Impact

Banks may be hesitant to lend large amounts on Khudkasht land.

Restricted ownership lowers the land’s mortgage value.

Summary

• Khudkasht = land personally cultivated by the owner.
• Includes owner’s labour, family labour or supervised hired labour.
• Clearly defined in law and supported by court judgments.
• Transfer often restricted → lower market value.
• Important for inheritance, loans, and development.
• Always check revenue records before buying.

1. What is an Occupant?

• A person who legally holds and uses government land (unalienated land).
• Not a tenant, not a trespasser, not a temporary user.
• The Maharashtra Land Revenue Code (MLRC 1966) divides such landholders into classes.

Class I, Class II and Class III (Government Lessee)

2. Occupant – Class I

• Full rights over the land.
• Can sell, gift, transfer or mortgage the land without restrictions (in most cases).
• Land is almost like freehold land.
• Land is highly valuable and easy to transfer.
• People who had strong land rights before 1966 usually fall in this class.

3. Occupant – Class II

• Have land in perpetuity (permanent), but with restrictions.
• Cannot sell or transfer land freely.
• They need Collector / Government permission for any sale or transfer.
• If they transfer without permission, the land can go back to the government.
• Land value is lower due to restrictions.
• Some older leaseholders (long-term leases) also fall under this class.

4. Class II Land Conversion (Upgradation to Class I)

• Class II land can be changed to Class I by applying to the Collector.
• Requires paying a premium (a fee decided by the government).
• After conversion, the land becomes fully transferable and more valuable.

5. Occupant Class III (Government Lessee)

(Commonly known as Class III, although legally called Government Lessee)

• This land is leased by the government to a person or institution.
• You do not own the land — you only have the right to use it.
• Very strict rules and almost no right to sell or transfer.
• Mostly given for special purposes like:
• School, hospital, public use land
• Temple or religious land (Devsthan Inam)
• Old service-related grants (Saranjam)
• Banks usually do not give loans on such land.
• Market value is very low because it cannot be sold freely.

6. Why Understanding These Classes is Important

• Helps you know whether you can buy or sell the land.
• Helps you understand whether you can get a loan on the land.
• Helps avoid legal problems if land has restrictions.
• Helps you plan construction, development, or investment safely.

7. How to Check the Land Class

• Check the 7/12 extract or land documents.
• Ask at the Talathi office, Tehsildar office or Collector office.
• A property lawyer can confirm the land class easily.

8. Summary

• Class I = Full rights, free to sell, best for investment.
• Class II = Restricted rights, need government permission to sell.
• Class III (Government Lessee) = No ownership, cannot sell, very restricted.

Understanding land type is very important before buying, selling, or developing land. In Maharashtra, the government has clear rules that tell whether land is agricultural or non-agricultural (NA). Here is a simple guide.

1. Check the 7/12 Extract (Satbara Utara)

This is the most important document for land in Maharashtra.

• It shows land ownership, type of land, and current use.
• If it says “agricultural land”, then the land is legally for farming.
• Always check the latest or updated 7/12 extract.
  

2. Check the Zoning in the Development Plan / Regional Plan

• Every area has a Development Plan (DP) or Regional Plan (RP).
• This plan shows which land is for agriculture, housing, commercial use, green zone, etc.
• If the zoning allows non-agricultural use, the land can be converted or may already be NA.

3. Look for NA Permission (Non-Agricultural Permission)

As per the Maharashtra Land Revenue Code, land used for non-agricultural purposes MUST have NA permission.

• NA permission is given by the Collector of the district.
• If the land does not have NA permission, it is still agricultural by default.

Some lands with approved building permissions automatically get an NA certificate under the newer rules.

4. Check the Land Tax / Assessment Records

• Agricultural land has an agricultural tax.
• Once land becomes NA, the government charges non-agricultural assessment (N.A. tax).
• If the NA tax is charged, the land is officially non-agricultural.

5. Observe the Current Use of the Land

• If crops are grown, it's probably agricultural.
• The construction of homes, businesses, or factories may result in NA or improper use of the land.
• Verify the documents thoroughly if the land has been plotted and sold for development. 

6. Check Conversion Documents

To change land from agricultural to NA, the owner must apply to the Collector's office.

• After approval, the Collector issues a Conversion Order.
• A fee or premium must be paid for conversion.
• Ask the owner for a copy of the conversion order if they claim the land is NA.

7. Meet Local Authorities or Experts

• Visit the Talathi, Tehsildar, or Collector’s office to confirm the land status.
• Town Planning departments can confirm zoning and permitted land use.
• A property lawyer or consultant can help check all documents properly.

8. Stay Updated with New Government Rules

• Maharashtra has recently made some processes easier.
• In certain cases, separate NA permission is not required if building permission is already approved.
• Check the latest state circulars before purchasing land.

Summary (Quick Checklist)

✔ Check 7/12 extract

✔ Check zoning in DP/RP

✔ Verify if NA permission exists

✔ Check tax records for NA assessment

✔ Ask for conversion order

✔ Visit local government offices

✔ Consult a property expert

✔ Stay updated with the latest rules

Understanding the types of agricultural land in India helps farmers, investors, and land buyers make better decisions. India’s land is broadly divided into five main categories based on how it is used.

1. Arable Land

• This is land used for growing regular seasonal crops such as wheat, rice, pulses, and vegetables.
• It is also called the net sown area — land that is ploughed and cultivated every year.
• This is the most important land type for India’s food production.

2. Horticultural Land

• Used for fruits, vegetables, flowers, spices, and herbal plants.
• Often provides higher income than regular crops because fruit and vegetable farming can be more profitable.
• Commonly used for orchards (mango, banana, pomegranate), flower farms, and vegetable fields.

3. Pasture / Grazing Land

• Land where cattle, sheep, and goats graze naturally.
• Essential for the dairy and livestock industry.
• The land may not be suitable for crop farming, but it supports rural livelihoods through animals.

4. Plantation Land

• Used for long-term commercial crops like tea, coffee, rubber, coconut, and sugarcane.
• These crops grow for many years and require large, well-managed farmland.
• Plantation land is usually found in regions with a suitable climate and good rainfall.

5. Fallow Land

• Land that is left uncultivated for some time so that the soil can rest and regain fertility.
• Farmers leave land fallow to restore nutrients and improve future crop yield.
• Some land may be fallow for one year, and some may remain unused for a longer period.

Why These Categories Matter

• Helps farmers choose the right type of farming.
• Helps buyers understand what kind of land they are purchasing.
• Helps the government plan water usage, irrigation projects, and agricultural policies.
• Ensures sustainable use of land and better crop management.

What Does “Abadi Land” Mean?

Abadi land = land in a village or town that is built-up and residential, not for farming.

It covers: plots for houses, small shops, and community use.

This type of land is usually within the “inhabited” area of a village or town.

Key Characteristics of Abadi Land

1. Purpose: Mainly for living (homes), not for agriculture.

2. Location: Inside the populated area, not in farm fields.

3. Ownership: People can own it, but local (village) authorities or government/Gram Panchayat often manage it.

4. Legal Status: Governed by land revenue laws. Property disputes go to civil courts.

Why Registration Alone Isn’t Enough

Registering a sale deed proves a transaction happened, but it does not mean you are listed in the government land records.

After registration, your name isn’t automatically written in revenue documents like khatuni or jamabandi.

Mutation (Name Change in Government Records) — Why It’s Important

Mutation = process to update your name in the official land revenue records.

In many places, this is now mandatory for abadi land.

The mutation process is called Dakhil Kharij.

Once the mutation is done, your name appears in land records such as khatuni.

What Happens If You Don’t Do Mutation

Even with a registered deed, your name may not appear in official records.

Without a mutation, banks may refuse to offer a home loan because you aren’t the “legal” owner in government records.

Your ownership is less secure; future problems can come up in resale or inheritance.

What the New System Clarifies

Legal ownership no longer just depends on the deed — mutation is essential.

The rules now make it clearer who owns the land, who can sell it, and who has legal rights over it.

These changes protect buyers. With mutation, your name is officially recorded in government documents.

What You Must Do as a Buyer

1. Make sure you get a registered sale deed when you buy abadi land.

2. Immediately apply for mutation (Dakhil Kharij) with the local revenue office.

3. Verify in land revenue records (khatuni/jamabandi) that your name appears.

4. Only after these steps will you have full legal ownership rights.