Interior Design for Business (2026): Starting a Design Firm in India — Registration, GST, Pricing and a Worked P&L

"Interior design for business" covers two different questions: how businesses buy interior design for their offices, shops and clinics, and how designers turn their skill into a business that makes money. This guide is about the second — starting and running an interior design firm in India. It's written for a designer leaving a studio job, an architect adding interiors, or a carpentry or modular-furniture business moving into design-led projects. You'll get the registrations, the GST split between design fees, works contracts and furniture, the pricing models clients understand, the contract clauses that protect you, how vendor margins should work, and a worked monthly P&L. Rules were checked in October 2026.

Quick answer

To start an interior design business in India, choose a structure, register for GST (compulsory above ₹20 lakh of turnover, and practical from day one if your clients are businesses), take free Udyam registration, and build a portfolio, a standard contract and a vendor panel. Design fees carry 18% GST (SAC 998391); a design-and-build fit-out is a works contract at 18%.

• Pricing models: per sq ft, percentage of project value (roughly 6–15%), lump sum, or turnkey per sq ft

• Business clients deduct TDS: 10% on design fees above ₹50,000 a year

• Disclose vendor commissions and trade discounts in your contract

• Worked example: a turnkey studio breaks even at about ₹13.5 lakh of billing a month

Choose your business model first

Most Indian interior firms fall into one of three models, and the choice drives everything else — your GST registration type, working capital, staff and risk.

Design-only consultancy. You produce concepts, layouts, 3D views, working drawings, a bill of quantities (BOQ) and specifications, and the client hires contractors and vendors. You may add periodic site visits. It needs little capital and your income is pure fee, but clients often treat design as "free if you execute", so you must sell the value of drawings clearly.

Design-and-build (turnkey). You design and execute: you hire carpenters, false-ceiling, electrical, painting and flooring teams, buy materials and hand over a finished space. Revenue per project is five to ten times higher than a design fee, but so is your risk — you carry material advances, labour payments and site variations, and you answer for every defect.

Modular and product-led. You sell factory-made kitchens, wardrobes and storage, with design as part of the sale. Margins come from manufacturing or from a dealer discount, and execution is quicker. Many studios combine modular for kitchens and wardrobes with site carpentry for everything else.

Three ways to run an interior firm

	Design-only	Turnkey (design-and-build)	Modular / product-led
Revenue per project	Fee only	5–10× a design fee	Product sale + design
Working capital	Low	High — material advances	Medium — factory advances
Main GST line	18% design service	18% works contract	Goods rate + installation
Biggest risk	Unpaid or copied drawings	Variations and defects	Measurement errors

Revenue per project

Design-only

Fee only

Turnkey (design-and-build)

5–10× a design fee

Modular / product-led

Product sale + design

Working capital

Design-only

Low

Turnkey (design-and-build)

High — material advances

Modular / product-led

Medium — factory advances

Main GST line

Design-only

18% design service

Turnkey (design-and-build)

18% works contract

Modular / product-led

Goods rate + installation

Biggest risk

Design-only

Unpaid or copied drawings

Turnkey (design-and-build)

Variations and defects

Modular / product-led

Measurement errors

Start with what your cash allows. A designer with a small savings buffer usually starts design-only or with small turnkey jobs (one room, one shop), and uses those to build a portfolio and a reliable crew before taking a whole villa or office floor.

Registrations you need

Business structure. A proprietorship is the simplest start: your PAN is the business PAN, and you can register under a trade name. Two designers starting together should sign a partnership deed or form an LLP, which limits personal liability and makes it easier to bring in a partner later. A private limited company makes sense when you want to raise money, take large corporate contracts or keep a clear separation between personal and business assets. See our guides to LLP registration and private limited company registration.

GST registration. Registration is compulsory once aggregate turnover crosses ₹20 lakh for service providers (₹10 lakh in special-category states). In practice, most interior firms register early: corporate and commercial clients want a GSTIN on your invoice so they can claim credit, and as a turnkey contractor you'll want to claim input tax credit on plywood, hardware, lights and sub-contractor bills. See our GST registration guide.

Udyam registration is free and online, and helps with bank finance and collateral-free loans. Shops and Establishments registration under your state's Act is needed for a studio or office, and most states then require professional tax registration once you pay salaries. A trade licence from the municipality may also be needed for a showroom. Trademark your firm name once you're sure of it; interior studios are built on reputation, and a name dispute after three years of marketing is expensive.

GST on interior design: design fee vs works contract vs goods

This is where many new firms get it wrong, because one project can contain three different kinds of supply.

1. Design services. A design fee — concept, drawings, 3D views, BOQ, supervision — is a service classified under SAC 998391, "specialty design services including interior design", within Heading 9983 (other professional, technical and business services). It is taxed at 18% (9% CGST + 9% SGST, or 18% IGST for an inter-state client).

2. Fit-out works contracts. When you execute work that becomes part of the building — false ceilings, built-in joinery fixed to walls, flooring, wall panelling, electrical and plumbing, painting — and both material and labour pass to the client, that is a works contract under GST, a supply of service under Heading 9954. Composite works contracts are taxed at 18% with input tax credit; since 22 September 2025 there are no concessional 12% entries left for ordinary works contracts. You don't split the invoice into material and labour.

3. Goods. Loose furniture, sofas, rugs, curtains, light fittings and appliances that you supply separately — not fixed to the building — are a supply of goods, taxed at the rate for each item's HSN code. Much furniture is at 18%, plywood at 18%, while some bamboo and cane furniture is lower; see our GST on furniture guide.

GST on an interior project — three kinds of supply

What you bill	GST treatment	Rate
Design fee (concept, drawings, BOQ, supervision)	Service, SAC 998391	18%
Fit-out fixed to the building (ceilings, built-in joinery, flooring, wiring)	Works contract, Heading 9954	18% with ITC
Loose furniture, furnishings, appliances	Goods, by HSN code	Item rate, e.g. furniture 18%

Design fee (concept, drawings, BOQ, supervision)

GST treatment

Service, SAC 998391

Rate

18%

Fit-out fixed to the building (ceilings, built-in joinery, flooring, wiring)

GST treatment

Works contract, Heading 9954

Rate

18% with ITC

Loose furniture, furnishings, appliances

GST treatment

Goods, by HSN code

Rate

Item rate, e.g. furniture 18%

Composite or mixed supply? If design and execution are naturally bundled under one contract for a fit-out, the principal supply is usually the works contract, and the whole contract is taxed at the works-contract rate. If you sign a separate design agreement and a separate execution contract, each is taxed on its own — which is fine as long as both reflect what actually happens. Many studios issue a design-fee invoice at booking and a works-contract invoice for execution stages; just keep the contracts consistent with the invoices.

Working in another state. For services directly related to immovable property, the place of supply is where the property is located, so a Pune studio doing a Goa villa charges IGST. Executing works on site in another state can also require registration there; take advice before you start a project outside your home state.

Composition scheme. A small service provider with turnover up to ₹50 lakh can opt for the services composition scheme at 6%, but you can't claim input tax credit or charge GST separately, and B2B clients lose their credit. For turnkey firms buying lots of taxed material, composition is usually worse than regular registration.

Income tax and TDS on your fees

Under the Income-tax Act, "professional services" include interior decoration, so business clients deduct TDS at 10% from your design fees once their payments to you in the year exceed ₹50,000. From 1 April 2026 these deductions sit under section 393 of the Income-tax Act, 2025, but the rates and thresholds carried over. For execution contracts, clients usually treat the payment as a work contract and deduct 1% (individuals and HUFs) or 2% (others). Individuals hiring you for their own home generally don't deduct TDS.

Check the TDS credit in your annual tax statement every quarter and chase clients who deduct but don't deposit — that credit is your money. A proprietor whose professional receipts are within the presumptive limits can consider declaring income on a presumptive basis and filing ITR-4; confirm eligibility and current limits with your CA, because turnkey execution income may be treated as business rather than professional receipts. See what is TDS.

Pricing models and what to charge

There is no official fee scale for interior designers in India, so firms price on one of four models. The ranges below are market estimates drawn from published 2026 guides by Design Cafe, The Interior Company and others, and from typical studio quotes; use them to sanity-check your own costing, not as a rate card.

For context, published 2026 guides put a typical 2 BHK home interior at about ₹7–10 lakh and a 3 BHK at ₹10–15 lakh, and The Interior Company lists Delhi turnkey rates from about ₹1,000–₹1,200 per sq ft for a 2 BHK to ₹3,000–₹3,500 for villas. Commercial fit-outs price differently again, because they include services such as HVAC, fire and data cabling.

Whatever the model, define the area basis (carpet or built-up), the deliverables (how many layouts, 3D views, revisions, site visits), and what is excluded (civil changes, appliances, loose furniture, GST). The percentage model has a built-in conflict — your fee rises when the client spends more — so many studios cap it or switch to a lump sum above a budget threshold. Build your turnkey rates from a costed BOQ, not from a competitor's per-sq-ft brochure. Our quotation generator helps you lay out a BOQ-style quote with GST.

Contracts and payment stages

A written contract is your main risk control. For design-only work it can be short; for turnkey it should be detailed. Cover at least: scope and drawings list, BOQ with specifications and brands, allowances for items the client will choose later, timeline and what delays it, variation procedure (written approval and price before work), payment stages, warranty (often one year on workmanship, longer on hardware per manufacturer), defect-liability and snag-list process, intellectual property in your drawings, and dispute resolution.

A typical turnkey payment schedule

1. 1

   Booking and design fee

   A booking amount or the design fee on signing — this pays for measurement, concepts and layouts.

2. 2

   Design sign-off and order release

   A large stage payment (often 40–50% of execution value) when the client approves drawings and BOQ, so you can order modular units and materials.

3. 3

   Mid-site milestone

   A further payment when carcasses are installed and ceilings and electrical are done.

4. 4

   Handover

   The balance on handover after the snag list, with a small retention if the client insists — agree it in writing.

Never let execution run ahead of payments: a turnkey firm that has paid for ₹6 lakh of plywood and modular units with ₹3 lakh collected is financing its client. Tie every order to a payment stage, and put the variation rule in bold — most disputes are about "small changes" nobody priced.

Vendor margins, commissions and procurement

Interior firms earn on supply as well as fees, and how you handle that decides whether clients trust you. Manufacturers and dealers of modular kitchens, hardware, lighting, tiles and furnishings commonly give designers a trade discount or a referral commission; studios also mark up the items they buy and install. Typical studio mark-ups on supplied items run roughly 10–30% in our estimate, depending on whether the studio carries stock and warranty risk.

There are two honest ways to run this. Transparent-fee model: you pass trade discounts to the client and charge a clear design and project-management fee. Margin-inclusive model: your quote is a fixed price per item, and the contract says plainly that prices include your margin and any trade discounts you receive. What causes trouble is the third way — a "free" design with hidden commissions — which collapses the moment a client checks a price online. Whatever you choose, all commissions are your income and must be invoiced and taxed; an undeclared commission from a vendor is also a GST supply by you.

Build a vendor panel of two suppliers per category, compare quotes quarterly, and keep purchase orders and delivery challans for every site. Pay carpenters and site teams by bank transfer against measured work, and don't release the last payment until the snag list is closed.

Setup costs

A small studio needs far less capital than a contractor, but turnkey work needs working capital. Our estimate for a two-designer studio in a tier-1 or large tier-2 city: studio or shared office deposit and set-up ₹2–5 lakh; laptops, a rendering workstation and software subscriptions ₹2–3 lakh; sample library (laminates, fabrics, hardware) mostly free from vendors; website, portfolio photography and launch marketing ₹1–2 lakh; registrations and legal templates ₹20,000–₹50,000; and working capital of ₹5–10 lakh if you execute — enough to cover one project's material advance before the client's stage payment clears. Banks and NBFCs offer working-capital and Mudra loans to service firms; a clean GST return history and Udyam registration help.

Worked example: monthly P&L of a turnkey studio

Here is an illustrative month for "Studio Aangan", a two-partner design-and-build studio in a tier-1 city doing mostly 2 and 3 BHK homes. All figures are MSMETOOLS estimates, excluding GST.

Revenue: two projects' worth of billing a month — ₹15 lakh, including design fees.

Variable cost per ₹1 lakh billed: materials and modular units ₹48,000; carpenters, ceiling, electrical, painting and polish teams ₹18,000; transport, site consumables and debris removal ₹3,000; warranty and rework provision ₹3,000 — ₹72,000. Gross margin (contribution) = ₹28,000 per ₹1 lakh billed (28%).

• Contribution = ₹15 lakh × 28% = ₹4,20,000
• Profit after partners' salaries = ₹4,20,000 − ₹3,78,000 = about ₹42,000 a month
• Break-even = ₹3,78,000 ÷ ₹28,000 ≈ 13.5 units of ₹1 lakh — roughly ₹13.5 lakh of billing a month

Two things stand out. First, a two-point slip in gross margin — from a mis-measured kitchen or an unpriced variation — wipes out most of the month's profit. Second, design fees are the cheapest revenue you have: ₹1 lakh of design fees carries almost no variable cost, so a studio that charges properly for design needs far less execution volume to break even. Try your own numbers, treating each unit as ₹1 lakh of billing.

Try it — studio break-even (unit = ₹1 lakh billed)

Monthly Fixed CostsSelling Price per UnitVariable Cost per Unit

Contribution Margin / Unit₹28,000.00

Contribution Margin Ratio28%

Break-Even Revenue₹13,50,000.00

Break-Even Units14

Open the full Break Even Calculator (PDF, save, compare)

Winning clients

Most residential work comes from referrals, builder and architect tie-ups, and social media portfolios; commercial work comes from property consultants, landlords' fit-out lists and repeat corporate clients. Photograph every finished project properly — it's your most valuable asset. Offer a paid first consultation rather than free designs; clients who pay for a consultation convert better and respect your time. For offices, shops and clinics, learn the client's operational needs — patient flow, retail display, workstation density — because business clients buy outcomes, not mood boards. A clear proposal with phases, deliverables and fees beats a glossy brochure.

Mistakes that sink new interior firms

• Free design to win execution. You lose the cost of design when the client takes your drawings to a cheaper carpenter. Charge a design fee and adjust it against execution if you must.
• Quoting per sq ft without a BOQ. Two "2 BHK" homes can differ by ₹3 lakh in joinery alone.
• Letting variations run unpriced. Get written approval and a price for every change.
• Wrong GST on invoices. Don't invoice a fixed fit-out as "furniture" or split material and labour to lower the rate; a works contract is taxed as a whole.
• Funding clients' projects. Order only against stage payments.
• Hidden commissions. Disclose them, or don't take them.

Official links

• GST rate notification 11/2017 with services classification (Telangana consolidated copy)Heading 9983 and SAC 998391 interior design
• GST Council — 56th meeting press releaseWorks contract and furniture rate changes from 22 Sep 2025
• GST portal — new registrationRegister for GST
• Udyam Registration portalFree MSME registration
• Income Tax e-filing — ITR-4 helpPresumptive income for professionals

What to do next

Decide your model, register the business and GST, and write a standard proposal and contract before your first paid project. Build your rate card from a costed BOQ — the quotation generator and invoice generator handle GST lines — and test your monthly numbers in the break-even calculator. If your clients are building from scratch, our guide to construction cost per sq ft helps you talk budgets with them, and the construction business plan covers contractor registration if you move into civil work.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How do I start an interior design business in India?

Pick a structure (proprietorship, LLP or private limited company), open a current account, register for GST once your turnover crosses ₹20 lakh — earlier if your clients are businesses — and take Udyam and Shops and Establishments registration. Build a portfolio of two or three completed projects, standard contracts and a vendor panel before you spend heavily on a studio.

What is the GST rate on interior design services?

Interior design fees fall under SAC 998391 (specialty design services) and are taxed at 18%. If you also execute the fit-out — ceilings, joinery, flooring, electrical — as one contract for immovable property, it is a works contract taxed at 18% with input tax credit. Loose furniture you supply as goods carries its own goods rate.

How much do interior designers charge in India?

Design-only fees are usually charged per sq ft, as a lump sum or as a percentage of the project value; published guides put percentage fees at roughly 6–15%. Turnkey design-and-execute packages for homes are commonly quoted at about ₹800–₹2,500 per sq ft depending on finish. These are market estimates, not standard rates — price from your own costing.

Is an interior design business profitable?

It can be. In our worked example a turnkey studio billing ₹15 lakh a month at a 28% gross margin covers ₹3.78 lakh of fixed costs, including the owner's salary, and keeps about ₹42,000. Break-even is around ₹13.5 lakh of billing a month. Margins depend on accurate estimating, controlling site variations and getting stage payments on time.

Do clients deduct TDS from an interior designer's fees?

Business clients usually do. Fees for professional services — which include interior decoration — attract TDS at 10% once payments in a year exceed ₹50,000, now under section 393 of the Income-tax Act, 2025. Execution contracts are treated as work contracts, with TDS of 1% or 2%. Claim the credit in your return.

Can I take commissions from vendors as an interior designer?

Trade discounts and referral commissions are common, but disclose them in your contract. Either pass discounts to the client and charge a transparent fee, or state that your quoted price includes your margin on supply. Undisclosed commissions damage trust, invite disputes, and must still be recorded and taxed as your income.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Notification No. 11/2017-State Tax (Rate) as amended, with scheme of classification of services — Telangana consolidated copy — Commercial Taxes Department, Telangana · accessed 9 October 2026
2. 2.Recommendations of the 56th GST Council meeting (press release) — GST Council / PIB · accessed 9 October 2026
3. 3.ITR-4 and presumptive taxation — help page — Income Tax Department · accessed 9 October 2026
4. 4.Section 194J — TDS on fees for professional or technical services — TaxGuru · accessed 9 October 2026
5. 5.How much does an interior designer cost in 2026? — Design Cafe · accessed 9 October 2026
6. 6.Interior design cost in Delhi 2026 — The Interior Company · accessed 9 October 2026
7. 7.Cost of building a house in India: your complete 2026 guide — JK Cement · accessed 9 October 2026