What will the government's slashing corporate tax rate mean for solar?

The government’s move to slash corporate tax rates to 22% from 30%—and to 15% for new manufacturing companies—has largely been hailed by the solar industry even as it feels impact will be limited. The effective corporate tax rate of around 25% would be on par with other South Asian countries.

What tax incentives are available for solar energy investment?

1. Accelerated Depreciation Benefit Probably the most important tax incentives available to any business—investing in solar energy—are accelerated depreciation benefits under Section 32 of the Income Tax Act in India.

How accelerated depreciation benefits can a business benefit from solar energy?

Probably the most important tax incentives available to any business—investing in solar energy—are accelerated depreciation benefits under Section 32 of the Income Tax Act in India. According to the schedules, it allows a company to consider 40% of the total cost of installations in the very first year for depreciation.

Is solar energy a good investment for a corporation?

On the other hand, solar energy, being the most hassle-free and efficient form of renewable energy, acts like a double benefit for any corporation since it reduces carbon footprints as much as reaping in massive corporate tax benefits.

Can a company claim tax credits for solar panels?

This is not all; companies investing in solar can also earn tax credits and deductions. MNRE has various schemes under which a company can claim tax credits for the installment of solar panels, which shall be offset against the direct tax payable, thus encouraging more and more solar investments. 4.

What is solar tax depreciation & how does it work?

Let’s dive deeper to understand more of it. AD allows businesses to claim higher solar tax depreciation rates for assets used in renewable energy projects. Under the standard depreciation rate of 20% on plant and machinery, businesses recover their investment in assets over a period of time.