Tax Benefits Solar Power India

If you are a profit making company you need to pay corporate tax 35 on your book profits.

Tax benefits solar power india.

Income tax for solar power generation units is 80 and it is an accelerated rate of depreciation. The accelerated depreciation benefit allows the commercial and industrial users of solar power in india to depreciate their investment in a solar power plant at a much higher rate than general fixed assets. The normal depreciation rate for any general plant and machinery is 15. But remember depreciation is 20 on plant and machinery for any business.

While calculating book profits you add depreciation to your expenses and. Solar power also trails hydropower biomass and. This in return allows the user to claim tax benefits on the value depreciated in a given year. In june 2015 india announced that it would develop 175 gigawatts gw of renewable energy capacity by 2022.

In india any investments in solar power plants can benefit from an important tax incentive the accelerated depreciation ad benefit. Ad benefit in year one is rs1 85 cr. Yet despite the increase of available solar energy over the past 10 years solar still only accounts for 1 8 of total energy used in the u s. It works as follows.

So the actual project cost of solar power plant for an ad client is rs5 15cr. In the case of solar power generation in order to incentivize the entrepreneurs. Note that india has set the target to set up 100 gw of solar power generation capacity by 2022 1giga watt is 1 000 mega watt. Scenario uptil 31 st.

Tax liability for solar power business in india india with its initiates in the field of. The installed capacity of solar rooftop augmented from 117 mw to 1250 mw from the period between 2013 to 2016. The way forward surely is to rationalise and extend the tax deduction on offer rs 1 5 lakh to also include solar roof top power systems. Solar power is being promoted in corporates and private sector by govt of india through tax relief by allowing them to avail higher rate of depreciation more often termed as accelerated depreciation ad benefit under section 32 of income tax act.