I own a commercial property and have recently incurred expenses for building construction, interior design, office fit-outs, and renovation work. Which of these expenses can be claimed as deductions under the Income Tax Act? Are construction costs treated differently from interior renovation expenses for tax purposes? How should commercial property owners account for these expenses while filing income tax returns?
Major structural construction, office fit-outs, and permanent interior renovations are capital expenditures claimed via annual depreciation under Section 32 (typically at 10% for buildings/furniture or 15% for equipment). Routine repairs, painting, and maintenance are revenue expenditures that can be claimed as a 100% tax deduction in the year incurred under Section 30/37(1).