Most of the guests were sleeping at the time the fire broke out and suffocated to death.
At least four others were injured. During the four-hour long rescue operation, around 50 people were pulled out from the hotel by the police and fire service officials.
"The fire has been doused", Deputy Chief Fire Officer Sunil Choudhary said earlier "The bodies are being taken out now".
The fire has been extinguished, but authorities are letting the building cool in order to investigate what sparked it.
The hotel is in the Karol Bagh district, a busy commercial centre crisscrossed by narrow alleys where electric wires dangle overhead.
Karol Bagh, filled with shops and budget hotels, is popular with tourists.
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Three members of an extended family were among the dead.
"As per information gathered from the site, it reveals that the incidence of fire accrued at second floor at around 3.30am on February 12 due to short-circuit", the official said. "Apparently, there were lapses (from the hotel administration's side) and action will taken against those found guilty", he said.
Many structures, both old and new, lack proper fire exits. But the building appeared to have six floors, including a basement and a kitchen built on top of the roof, Jain said.
President Ram Nath Kovind and Prime Minister Narendra Modi have condoled the loss of lives and expressed hope that the injured will recover soon.
Building fires are particularly frequent in big Indian cities where millions live in cramped and dilapidated properties.
Last week, a fire broke out in a hospital in Noida, forcing an emergency evacuation of scores of patients and other people.