"Five people have succumbed to their injuries after the chartered plane crashed, including one pilot, three co-passengers and a pedestrian," Mumbai police spokesperson Deepak Deoraj told AFP.
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There were four passengers on the 12-seater aircraft when it crashed shortly into the construction site shortly after 1:30pm (0800 GMT), said Mumbai disaster management spokesperson Tanaji Kamble.
India's Directorate General of Civil Aviation (DGCA) said the plane was a turbo-prop King Air C-90.
It crashed while conducting a test flight from the nearby Juhu airstrip, DGCA said in a statement.
"There were two pilots and two aircraft maintenance engineers on board. All onboard (the) aircraft along with one person on ground are dead," the statement read.
Images broadcast on Indian news channels showed flames and black smoke billowing from the area which sits right next to several high-rise residential towers.
One video clip circulating on social media - which could not be independently verified - showed a body in flames on the pavement.
It was not raining at the time of the accident and weather did not appear to be a factor in the crash.
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DGCA said it was sending a team to investigate the cause, adding that the aircraft was owned by a private operator who had purchased it from the Uttar Pradesh state government.
P Rahangdale, Mumbai's chief fire officer, said several fire engines had rushed to the spot.
"Our teams have extinguished the fire and are conducting rescue operations," he told AFP.
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