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ACCELERATED DEPRECIATION (AD)

Tax incentives for commercial solar projects in India

AD is a method of depreciation used to depreciate the assets in a manner that a significant depriciation is allowed in the first few years. AD can reduce costs during the project’s start up year. In solar projects, accelerated depreciation is widely used as an incentive to lessen the burden of tax for commercial and industrial users.

In India, AD allows end users, mostly setting up capacity for captive usage, to take advantage of up to 80% of the project cost in the first year and remaining 20% in the second year.

For example, a 100 kWp installed with a capital cost of approximately INR 70 Lakhs, the commercial user can write off payable tax for up to INR 21 Lakhs in the first year of operation.

Want to claim accelerated depriciation for investing in solar in India?
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